How To Wholesale Real Estate In Wisconsin: Step-By-Step (2024)

With a population of over 5.8 million and more than 2,770,583 housing units of available housing, Wisconsin offers ample opportunity for real estate wholesaling.

Wholesaling is a real estate investing technique that allows practitioners to make substantial fees without ever purchasing a property or completing any educational requirement. It's something virtually anyone can do as long as they have some free time and a willingness to learn.

While you may need some spare cash to pay for a few basic start-up costs, you certainly don't need to make risky investments or leverage your credit. Plus, you get to learn about the business, make connections, and have the ability to earn significant fees in a relatively short amount of time.

As a result, wholesaling is an excellent strategy for beginners and anyone who wants to learn more about the real estate business. But to be successful, you must understand a few basic concepts and develop a step-by-step plan.

Here's a look at everything you need to know about how to wholesale real estate in Wisconsin.

• What Is Wholesaling Real Estate?
• How To Wholesale Real Estate In Wisconsin (9 Steps)
• Is Wholesaling Houses Legal In Wisconsin?
• How Much Do Real Estate Wholesalers Make In Wisconsin?
• Do You Need A License To Wholesale Real Estate In Wisconsin?
• Is Wholesaling In Wisconsin Easy?

*Before we begin our guide on wholesaling real estate in Wisconsin, we invite you to view our video on How To Wholesale Real Estate Step by Step (IN 21 DAYS OR LESS)!

Host and CEO of Real Estate Skills, Alex Martinez, provides a comprehensive, step-by-step guide for beginners to start wholesaling real estate!

What Is Wholesaling Real Estate? 

Wholesaling is an investment strategy that involves scouting an investment property, getting it under contract, and then selling that contract to a buyer for a fee. While it's not necessarily an easy endeavor, it's not as risky or time-consuming as flipping houses or purchasing rental properties.

As a wholesaler, you collect the difference between the price you negotiate with the homeowner and the price paid by the end buyer. So, you must have a keen understanding of the real estate market and great negotiation skills to be successful.

As a wholesaler, you will go out and find distressed properties, which means they may be going into foreclosure or the owner is behind with maintenance, property taxes, or other obligations. You will then approach the owner with a discounted cash offer that allows them to walk away from the property and avoid financial ruin.

You will then have them sign a wholesale real estate contract that confirms they are willing to let the property go at the agreed-upon price. You will market that contract to other real estate investors until you find someone willing to buy the deal at a markup, then assign the contract over to them for a fee.

If done correctly, this allows you to earn a handsome profit with no money down or any involvement in the deal beyond the sale. But you must have a solid strategy and business plan if you want to be successful in real estate wholesaling. 

How To Wholesale Real Estate In Wisconsin (9 Steps)

Let us take a closer look at the steps you will take to close your first wholesale deal in Wisconsin. With that in mind, here's our simple step-by-step process for wholesaling real estate in Wisconsin:

1. Partner With A Wholesale Mentor
2. Learn Wisconsin Real Estate Wholesaling Laws & Contracts
3. Understand The Wisconsin Real Estate Market & Lingo
4. Build A Cash Buyers List
5. Find Motivated Sellers & Distressed Properties
6. Put Distressed Properties Under Contract
7. Assign The Contract To the Cash Buyer
8. Close Deal And Collect Assignment Fee
9. Double Close Or Wholetail When Necessary

1. Partner With A Wholesale Mentor

Although not necessarily required, finding an experienced mentor can help you expedite the learning process. A wholesale real estate mentor will not only show you the ropes but can also provide valuable advice that will help you avoid costly mistakes. Wholesaling on your own involves a lot of trial and error.

While a certain amount of experimentation will be necessary regardless of how you approach the wholesale business, a mentor can point you in the right direction and help you avoid potential roadblocks that may make you want to quit altogether.

You can often find mentors at local real estate investing clubs, on social media sites, or even in your own professional network. While you certainly don't need a mentor to be successful, if you can find someone qualified that you trust, it can save you valuable time and energy.

Thinking about investing in real estate? Join Alex Martinez at his FREE training to learn how to get started with house flipping and wholesaling!

2. Learn Wisconsin Real Estate Wholesaling Laws And Contracts 

The next step is to familiarize yourself with the proper Wisconsin real estate laws and contracts. A good wholesaler will understand the legislation impacting the real estate market and the appropriate contracts to close a deal. As a wholesaler, understanding contracts is essential.

Handshake agreements will not suffice because you can easily be cut out of a deal if you don't have the proper paperwork in place - which means you won't be compensated for your hard work. So to avoid that, you must have a thorough understanding of contracts and how to use them.

You should familiarize yourself with a few key documents if you want to successfully wholesale real estate in Wisconsin. The first is the Wisconsin WB-11 Residential Offer To Purchase, the standard document approved by the Wisconsin Real Estate Examining Board to officiate the purchase of any property.

The other document you should study is the assignment of contract. This contract allows you to transfer the rights and obligations of property ownership over to another individual for compensation. You will likely encounter both documents in your journey as a wholesaler, so study them closely.

3. Understand The Wisconsin Real Estate Market And Lingo

Next, you'll want to familiarize yourself with the local real estate market and lingo. Although the same basic concepts apply no matter where you go, every market has unique price points and factors that impact property values.

For instance, home prices in Milwaukee are likely much different than in Appleton or Green Bay. As a Wisconsin wholesaler, you must thoroughly understand market values, so you price your offers correctly. If your offer is too low, a seller will be less inclined to accept, but if you price it too high, you'll struggle to find an end buyer. The trick is to find that sweet spot that allows you to turn a profit, but you'll only find it if you study the market closely.

It also helps to familiarize yourself with the local market lingo so you can have sophisticated conversations with both investors and homeowners. You can find useful resources online that can help you define a few basic real estate terms. You should also spend time with other investors and real estate professionals to learn the vocabulary firsthand. The National Association of Realtors (NAR) is an excellent place to network with other real estate professionals in the area.

A few prominent Wisconsin NAR chapters include:

• Wisconsin REALTORS Association
• Greater Milwaukee Association of Realtors
• The Realtors Association of Northwestern Wisconsin
• The Realtors Association of Northeast Wisconsin
• The Western Wisconsin Realtors Association

4. Build A Cash Buyers List

Once you've done your preliminary research, it's time to build a cash buyers list. Wholesale deals tend to move quickly, so you'll want to find a buyer with the funds available to purchase a property as soon as you get a deal under contract. But if you wait until you already have a deal to look for a buyer, you may not find one in time.

The way around this is to build a cash buyers list before you start scouting properties. Connect with other real estate investors at local events, on social media, or through your own marketing campaigns and collect some basic information to save for a later date.

Collect the following information from potential cash buyers:

• Contact information (name, business name, phone number, email, etc.)
• What types of properties do they buy (single-family, condominium, multifamily, etc.)?
• How soon are they looking to buy?
• Do they work in a particular market?
• What's their budget, and how do they finance deals?
• Any other relevant information

Save this info in a spreadsheet or CRM software to reference when you find a deal. The more organized and detailed your buyer's list, the easier it will be to close the sale when it comes, so be diligent and methodical with your findings.

Read Also: Top 23 Real Estate Wholesaling Software To Scale Your Business

5. Find Motivated Sellers And Distressed Properties 

When you feel confident in your cash buyers list, you're ready to go out and search for distressed properties. You'll want to look for motivated sellers - which means that the homeowner is eager to sell and will accept a lower price in exchange for a fast close. Often, this is because the property is in foreclosure, but it could be due to tax problems, maintenance issues, or a sudden life change such as a death or divorce.

You can find motivated sellers by:

• Searching public records for recent foreclosures, divorces, bankruptcies, etc.
• Post bandit signs that say "We Buy Houses" of "Sell Your Home for Cash"
• Post ads on Craigslist or Facebook
• Go driving for dollars or drive around your neighborhood looking for run-down buildings and contact the owner
• Send out direct mail advertisements

Marketing is a major part of your wholesale business, so you'll have to develop a strategy that works for you.

Dive into real estate wholesaling with confidence. Download our FREE Wholesaling Cold Calling Script! 

Read Also: Finding Motivated Seller Leads: Free & Paid Tactics

6. Put Distressed Properties Under Contract

The next setup is often the trickiest part of the entire operation: getting the property under contract. Before you make your offer, you'll want to do a few quick calculations to ensure you price it appropriately:

• After Repair Value (ARV)
• Maximum Allowable Offer (MAO)

After-Repair-Value (ARV)

The ARV is the price a property will be worth once it's renovated to market standards. Most distressed properties aren't in the best condition, so the end buyer will need to invest money in renovating the home before putting it on the market.

Investors use ARV to determine how much they can invest in a property and still turn a profit - which you should use to evaluate your offer. The basic formula is:

ARV = Property Square Footage x Average Price Per Square Foot

Try to get a rough estimate of the square footage of your wholesale property, either by looking online or asking the owner. Then find 3 - 5 comparable properties in the area that have sold recently (known as real estate comps). Divide the final sale price of each property by the square footage and then take the average to find a rough price per square foot.

Then multiply the average PPSF by the square footage of your wholesale property to determine the ARV. You can either get a rough estimate by getting this information online or enlist the help of a real estate broker to ensure the info is accurate.

Maximum Allowable Offer (MAO)

Once you've determined the ARV, you can determine the MAO, which is the highest price you can offer and still make a profit.

The basic MAO formula is MAO = ARV - fixed costs - rehab costs - desired profit.

Fixed costs include the expenses related to owning the property while it is undergoing renovation, which include taxes, insurance, utilities, loan interest, etc. Rehab costs refer to the expenses required to get the property to market standards, and desired profit refers to the amount you'd like to make on the deal.

Say you have a property that would sell for $200,000 in good condition. You estimate it will cost $30,000 to rehab and $10,000 to own while renovating. The flipper wants to make at least $20,000 on the deal, and you'd like to walk away with a $10,000 fee.

So your MAO calculation would look like this:

$200,000 - $30,000 - $10,000 - $20,000 - $10,000 = $130,000

To make this deal work, you must get the property under contract for $130,000 or less. You can calculate the costs using a rehab calculator and other online tools. Or you can enlist the help of a contractor and broker to be more accurate. If you just want to do a rough calculation of your offer price, you can use the 70% rule, which means MAO = (ARV x 70%) minus repairs.

Some investors use this as a shortcut to avoid lengthy calculations. While this shorthand is often good for arriving at a ballpark figure, the more precise you are with your calculation, the greater your chances of success.

Read Also: Wholesale Real Estate Contract: Template & FREE PDF Download

7. Assign The Contract To Cash Buyer 

Once you've crunched the numbers and gotten the motivated seller to sign a wholesale contract, you're in the final stretch. You'll then want to reference your cash buyers list and look for anyone in the market for the type of property you have under contract. This is where having an organized and detailed list will come in handy.

Go down the list and contact as many candidates as possible until you find an interested buyer who accepts your price. Then, you will assign the contract to the new buyer and finalize the deal.

 *Want to learn the proven strategies for finding cash buyers? View our video below where Alex Martinez covers How To Find Cash Buyers For Wholesaling! [FREE]

Learn the FASTEST & EASIEST ways to find CASH BUYERS online for FREE using the Craigslist Trick!

8. Close Deal And Collect Assignment Fee

As a wholesaler, you will not be responsible for the property after you assign it to the new buyer. So you will collect your assignment fee as soon as the deal closes. The closing will be similar to any other property closing - you will meet with the buyer and their representation (lawyer, broker, etc.) and sign the necessary paperwork.

They will bring the required funds or arrange for a transfer, and you will collect the difference between the final sale price and the price you negotiated with the seller as a fee.

9. Double Close Or Wholetail When Necessary 

Also, keep in mind there are several different exit strategies you may consider. Most beginners will likely go with a traditional wholesale deal, which means you never actually take ownership of the property but act as a middleman between the buyer and seller. However, there are scenarios where you may consider alternative real estate transactions, such as a double close or wholetailing.

A double closing is when you close on the property twice -once with the seller and once with the end buyer. If structured favorably, you won't be required to put up any cash, but you will be included in the chain of title and briefly take ownership of the property. A double close may be required if the buyer is financing the purchase and the lender can't underwrite a wholesale contract.

Another strategy is wholetailing - which means you take ownership of the property and perform a few basic renovations before selling it. Wholetailing differs from flipping in that the upgrades are typically small and cosmetic as opposed to a full renovation. It offers a higher profit margin than traditional wholesaling but requires that you have the funds or credit to make the purchase.

Is Wholesaling Houses Legal In Wisconsin?

Yes, wholesaling real estate is legal in the state of Wisconsin; however certain conduct is prohibited. You aren't breaking the law if you don't perform any activities requiring a real estate license. But you are breaking the law if you represent any party in a real estate deal in exchange for a fee and don't have a Wisconsin real estate license.

Review Chapter 452 of the Wisconsin Statutes to learn what activities require licensure and the penalty for disobeying the law.

How Much Do Real Estate Wholesalers Make In Wisconsin?

According to Rocket Mortgage's public data records, the average payment for a real estate wholesale fee is usually 5% - 10% of the total property price nationwide.

Real estate wholesalers can make as much or as little as they want. Some make six figures per year while others struggle to make any money at all. It all depends on how much time you can spend learning the craft.

If a wholesaler in Wisconsin finds a buyer for a $150,000 property, then the wholesaler has the potential of making a $30,000 profit legally without even having to own the property themselves. 

Read Also: Wholesale Real Estate Salary: How Much Can You Make Wholesaling?

Do You Need A License To Wholesale Real Estate In Wisconsin?

No, a license is not required as long as you stick to wholesaling. A license is not required to buy and sell property on your own behalf; therefore, acting as a middleman is no different. A license is only needed if you plan on offering the services of a real estate agent - which includes representing another party in the transaction for a fee.

So don't give advice, negotiate, or market properties on behalf of anyone else involved in the deal for the money, and you should be fine.

Read Also: How To Wholesale Real Estate With A Realtor (2024)

Is Wholesaling In Wisconsin Easy?

It all depends on how you approach the business. Like anything else, wholesaling takes hard work, persistence, and discipline to succeed. You may face a fair amount of rejection early on and work hard to build a reliable system.

But while it isn't a get-rich-quick scheme, it's possibly the easiest way to earn four to five-figure checks relatively quickly. Finding a coach, or mentor or joining the Real Estate Skills Pro Wholesaler VIP Program can help expedite the process and make the steps much easier to follow. 

The Pro Wholesaler VIP Program is designed for the modern entrepreneur to learn the basics and how to help new real estate wholesalers avoid the pitfalls typically found by beginners. It is 100% online and is used for local and virtual real estate wholesaling.

Read Also: The Best Wholesale Real Estate Course (With Step-by-Step Training)

Final Thoughts On Wholesaling In Wisconsin

Wholesaling is a great way to make money while learning more about the real estate business. It doesn't require you to risk your capital or credit, yet you can make impressive returns without ever purchasing a property.

Plus, it can be a great entry point into other types of real estate investing, such as house flipping, wholetailing, or rental property investing. You must be willing to work hard and do your research to be successful. But with the right outlook and attitude, anyone can be successful.

To get started today, check out our brand new free training on how we help investors all across the country wholesale and flip houses from the MLS using only a laptop and a cell phone. See you there!