Have you ever thought about starting a side hustle? Need to make some extra money, but not sure how to get started?
One of the best ways to start is by making a list of everything you enjoy doing. And then get creative — brainstorming how to earn extra income by doing what you love.
Enjoy the outdoors? Start a landscaping business. An animal lover? Look into dog walking or pet sitting. Aspiring writer? Try selling short stories online through Amazon.
Have an eye for fashion? Check out consignment shops to start flipping designer clothing or even start a fashion blog. Pretty much any topic you can think of can conceivably be turned into a way to make money.
You need a little know-how, imagination, and a desire to succeed. And yeah, some endeavors may be less successful than others. But that’s the beauty of learning something new — it’s all a process, trial and error.
While you won’t be massively successful at everything you attempt to do, you will always be better off than when you started, whether it’s financially, educationally, or personally. (That’s my mantra, anyway!!)
But moving onto this week’s post — you’ll be hearing about a side hustle that Andrew and his wife turned into a super-successful side business.
And now, here is more about Andrew:
My name is Andrew. I am married, and we have two young kids at home. I’m a financial analyst by day and a real estate investor on the side.
I recently started blogging about our family’s journey to financial independence through real estate and have enjoyed helping others on their path to financial freedom through the blog.
The Interview Questions
Tell Us About a Fun, Unique, or Interesting Side Jam You’ve Tried:
We’ve done all kinds of things in real estate (rental property, flipping, real estate agent, etc.). But one of the more unique and profitable things we’ve done is wholesaling.
A wholesaler will find distressed houses and put them under contract for those who aren’t familiar with the term. Then they’ll sell the contract to another real estate investor who wants to rehab the house and flip it or rent it out.
So, for example, if I got a house under contract for $100,000, I’d then assign the agreement to another investor for, say, a $5,000 fee. They would then purchase the house for a net of $105,000, and I’d receive a $5,000 assignment fee.
What made you decide to learn more about wholesaling?
When my wife and I started thinking about having kids, we knew we wanted her to stay home with them. But we weren’t sure how to make our household budget work on just one income.
We decided to use some of our savings to put a down payment on a rental property and start building a passive income through real estate. However, once we got started, we caught the real estate bug and decided to jump into more active forms of investing.
We wanted to buy additional rental properties but were out of cash. So to generate more cash, we started looking for other deals that we could either flip or wholesale to invest in real estate with no money out of pocket.
After learning the ropes, we decided to focus exclusively on wholesaling to find good deals and sell them to other investors who had the capital and time to fix them up.
On Average, How Much Time Do You Think You Spend per Month Wholesaling?
Now that we have kids, we no longer do many wholesaling deals since it can be time-intensive. It doesn’t require a ton of hours, but you do have to be available to answer the phone at any time. And you must be willing to see houses right away if it seems like a great deal — before someone else puts it under contract.
Between my wife and I, we spent about 20 hours a week on wholesaling as we were scaling it up. That time was split between sending out marketing, answering phone calls, following up on leads, going out to see houses, and networking with other investors to add to our buyer’s list.
In general, how profitable was wholesaling for you?
Wholesaling can be very profitable, but it takes a lot of work and consistency. It’s also not an easy side jam to get started with little or no money.
At the peak of our wholesaling business, we spent $3,000 – $5,000 per month in marketing (direct mail, Google ads, etc.) to find good deals.
We probably averaged about a $10,000 net profit per deal and could cherry-pick and keep some of the best deals for ourselves as rentals or flips.
What type of research or learning curve is required for real estate wholesaling?
Many real estate “gurus” will tell you that wholesaling is the best way to start real estate investing with no money. But we found the learning curve to be quite steep.
To be a successful wholesaler, you have to find exceptional deals. Your customers are other real estate investors who already need a decent deal to make a profit. Knowing what a potentially profitable deal looks like takes some practice. First, you have to know the ARV (after repaired value – what it will sell for once it’s fixed up).
You also have to estimate repair costs, often with only a 5 – 10 minute walkthrough. And you have to know how other investors run their numbers to know what they’d be willing to pay for it.
For example, if I had a landlord on my buyer’s list who wanted to buy rental properties that met the one percent rule, I’d have to figure out what the house would rent for after renovations.
So I would run comps both for the value of the house and the monthly rent. If it would rent for $1,000 per month after $20,000 in repairs, then the investor might want to buy it at $80,000.
This means I’d need to get it under contract for $70,000 or less to be able to make a decent profit.
While the learning curve was steep initially, I learned a lot of info about real estate that’s helped us as we moved forward.
For example, after walking through hundreds of houses, I can now get a feel for ballpark repair costs, hidden repairs to look out for, and I am an expert at running comps.
What Tips Would You Have for Someone Who Wants To Get Started Wholesaling?
Wholesale is a great way to make a significant amount of money on the side if you’re willing to put in the work. If you’re looking to get started as a wholesaler, I would begin networking with other wholesalers and real estate investors to find out what they do day-to-day.
I found local meetups, Facebook groups, and online communities such as Bigger Pockets great places to learn and build my skills.
Beyond that, having the right mindset is essential. Wholesaling is certainly not a “get rich quick” scheme. There are a lot of ups and downs and trial and error to figure things out.
If you’re willing to commit and be in it for the long haul, it can be a rewarding side jam. Ultimately, as a wholesaler, you are a problem solver. It requires the mindset that your job is to help people in stressful situations (i.e. selling a deceased family member’s home, finding a creative way to help them avoid foreclosure, etc.)
Often wholesalers get a bad reputation because of a few bad apples who use these situations to take advantage of people. But you can be one of the good ones, genuinely there to help people through a difficult situation to reach a financial solution.
Overall, what have you learned from the wholesaling process?
To be successful wholesalers, we had to learn the ins and outs of real estate investing. As we continue to build our real estate portfolio, the skills we learned in marketing, evaluating a deal, and estimating repair costs are invaluable to us now.
I also learned a lot of sales skills. Since I’m an introvert by nature, talking on the phone or in person and negotiating don’t come naturally to me. It’s still not something I love doing, but learning sales and networking skills is something that’ll serve me well in any future entrepreneurial venture.
While I love real estate and the rush of finding a fantastic deal, I also learned some things about myself and what I didn’t really like about wholesaling. As I mentioned, I am an introvert, so the constant interactions with buyers and sellers were draining.
I also learned that I didn’t enjoy constantly being “on-call” — ready to drop everything to answer the phone or go see a house at a moment’s notice.
Is this something you would ever do again? Why or why not?
We still do some wholesaling today but have stopped most of our marketing. The leads we get now tend to come from relationships we built in the past.
Once the kids are a little older and we have more time to dedicate to the process, we may decide to become more involved. I think it’s a great way to earn extra money on the side. Or even as a full-time job if you put in the effort.
The Wrap Up
Real estate wholesaling isn’t exactly for the faint of heart and appears to require quick thinking and an even faster turnaround. But they could make good money and were successful together as a family. #TeamworkMakesTheDreamWork
Here are some takeaways I jotted down from Andrew’s interview:
- Tackling the most challenging projects will often result in a greater sense of accomplishment and help you grow as a person.
- Sometimes you need to spend money, to make money. (But only if you have the money to spend and won’t suffer dire consequences if the business deal goes south).
- Stepping outside of your comfort zone can benefit you long term and teach you valuable skills to move your career forward.
- But also remember to stay true to yourself — If you’re constantly on the go, you may want to hit the pause button once in a while to relax and re-energize.
Thank you again to Andrew for taking part in this series and providing so much valuable information on real estate investing! Be sure to check out his blog to read more about his family’s journey into financial independence.