Real estate investing isn’t just for adults. Smart teenagers can start building wealth by learning how to wholesale properties. Wholesaling is a straightforward way to get into real estate without needing a big bank account. It’s all about finding underpriced properties, securing them under contract, and assigning those contracts to investors for a profit.
This guide walks you through the entire process, focusing on how teens can start wholesaling step by step.
What Is Wholesaling?
Wholesaling in real estate means locating discounted or distressed properties, getting the owner to agree to sell, and assigning that contract to another buyer—typically an investor. Instead of buying the property yourself, you’re acting as the middleman.
The goal is to secure the property under contract well below its potential market value. You then pass it along to another buyer, usually for a higher price, while pocketing the difference as your assignment fee.
This strategy doesn’t require large sums of money, just a little time and effort.
Why Teens Can Succeed in Wholesaling
Teenagers are great candidates for wholesaling because the process doesn’t rely on personal credit or significant savings. It’s all about identifying opportunities and creating connections.
When teens learn to wholesale, they gain valuable real-world skills, from negotiation to networking to problem-solving. Plus, the potential to earn money and understand investments early builds financial independence.
A live example? Andrea, a teen featured in a recent discussion, is exploring wholesaling near her university to fund her own rent-free living arrangement.
Driving for Dollars: The First Step
The first step to wholesaling is finding properties. This is where “driving for dollars” comes in. It’s exactly what it sounds like—driving through neighborhoods and searching for houses that look neglected or troubled.
What to Look For
Keep an eye out for these signs of distress:
- Overgrown grass or bushes
- Broken windows or boarded-up doors
- Trash in the yard or abandoned vehicles
- Piles of newspapers or mail
- Homes that look dirty or poorly maintained
If it stands out as the haunted house of the neighborhood, it’s likely a great lead.
Staying Organized
While driving around, keep track of addresses. Write them down in a notebook or save them digitally. Take pictures so you can remember each property clearly.
Apps designed for real estate can streamline this process, but a simple map and list will do the job.
Researching Properties
Once you’ve identified potential leads, the next step is research. You’ll want to figure out who owns the property and how to contact them.
Using County Appraisal Districts
Every county has an appraisal district that holds property information. Many of these records are available online. You can search using the property’s address to find details like:
- Owner’s name and mailing address
- Tax values and payment history
- Square footage and lot size
This information helps you determine if the owner still lives there or if they’re renting it out or neglecting it entirely.
To find phone numbers or email addresses, use free tools like FastPeopleSearch.com. This site can often provide multiple ways to contact a property owner.
Once you collect this information, call, text, email, or even mail letters to introduce yourself and express your interest in buying the property.
Reaching out can feel intimidating, but it’s simple if you prepare. Be polite, direct, and show genuine interest in helping the owner solve their problem.
Example Script
“Hi, my name is [Your Name]. I’m interested in buying your property at [Address]. Have you thought about selling it? I’d love to talk more if you’re open to it. Feel free to call or email me back.”
If they don’t respond, be persistent. Stay respectful, but follow up after a week or two. You can also leave a handwritten note on their door if you can’t reach them.
Understanding Market Value
Before meeting the seller, you need to know what the property is worth. This ensures you make a reasonable offer that leaves room for profit.
After Repair Value (ARV)
ARV is the estimated value of a property after renovations are completed. To calculate ARV, look at comparable sales (comps) in the area:
- Find houses with similar size, age, and features
- Look at sold prices, not just listed prices
- Stay within the same neighborhood
Free websites like Zillow or Trulia can give you a rough estimate, but tools like Propelio or access to MLS provide more accurate data.
Estimating Repairs
On average, budget $20–$30 per square foot for repairs, depending on the property’s condition and location. Review the home during your visit to pinpoint key issues, like roof damage, outdated kitchens, or bad plumbing.
Making Your Offer
Once you know the ARV and rough repair costs, use this formula to calculate your maximum offer:
(ARV × 0.70) – Repairs = Maximum Offer
For example, if a home’s ARV is $200,000 and repairs total $50,000:
($200,000 × 0.70) – $50,000 = $90,000
This means you shouldn’t offer more than $90,000.
Preparing for Appointments
Before meeting with a seller, bring:
- A printed real estate contract (downloaded from your state’s real estate board)
- Research notes (tax info, comps, repair estimates)
- Confidence!
Fill out most of the contract ahead of time, leaving the price section blank. This signals you’re ready to do business.
Securing the Deal
If the seller agrees, both parties sign the contract. Include key details like:
- Earnest money ($10–$100 is often enough)
- Option period (ask for 30 days to allow inspections and finding buyers)
Deliver the signed contract to a reputable title company to begin processing.
Finding Buyers for the Property
With the contract secured, your job shifts to finding an end buyer. Social media is invaluable for this step.
Post on Facebook and Instagram, targeting local real estate investor groups. Share:
- Property details (square footage, bedrooms, city—but not the address)
- Your asking price (include your assignment fee in this total)
- Clear photos of the home
Building a Buyer’s List
Every time someone shows interest, add their contact info to a spreadsheet. Over time, you’ll build a list of investors you can reach out to directly for future deals.
Closing the Deal
Once you find a buyer, complete a one-page assignment contract that outlines your fee. If your fee exceeds $10,000, consider a double closing to keep the amount private.
The title company handles the rest: transferring ownership, ensuring legalities, and paying out fees.
Wrapping Up
Wholesaling offers teens an incredible introduction to real estate and entrepreneurship. By following these steps, teens can learn the basics of negotiation, problem-solving, and financial literacy—all while earning money.
The process may seem overwhelming at first, but with practice and persistence, anyone can succeed. Encourage your teen to start with a local area they know, stay organized, and always do their homework.
Have your teen hit the streets, find those distressed houses, and start building their future today!
