Real estate wholesaling sounds simple: Find a motivated seller, lock up a cheap property, and flip the contract to a cash buyer for a fee. But here’s the truth: Most new wholesalers lose money because they make the same avoidable mistakes.

After analyzing hundreds of deals (and talking to investors who’ve been burned), I’ve compiled the 10 most common wholesaling mistakes—and exactly how to dodge them. Whether you’re just starting out or stuck in a rut, this guide will save you time, money, and headaches.

Mistake #1: Overpricing Deals (And Scaring Off Buyers)

What Happens:
You find a house with an ARV of 300k and ask 250k, thinking buyers will fight over it. Instead… crickets.

Why It’s Bad:
Cash buyers want a 30% discount off the ARV (After Repair Value) to cover repairs, holding costs, and profit. Overpricing kills deals fast.

Fix It:
Use the 70% Rule:
Maximum Allowable Offer (MAO) = ARV x 0.70 – Repair Costs
Example:

• ARV = $300k
• Repairs = $50k
• MAO = (300k x 0.70) – 50k = 160k
  Offer The Seller 160k or less

Mistake #2: Not Building a Buyers List FIRST

What Happens:
You lock up a property, then scramble to find a buyer… and end up discounting your fee just to close.

Why It’s Bad:
No buyers list = no control. You’re stuck praying someone takes the deal.

Fix It:
Build your list BEFORE you market for deals:

• Attend local REIA meetings.
• Post in Facebook groups like “Cash Home Buyers [Your City].”
• Use Bandit Signs: “We Sell Discount Investment Properties – Text DEALS to [Your Number].”

Mistake #3: Skipping Due Diligence

What Happens:
You get excited about a “steal,” skip title checks, and later discover the property has $20k in unpaid taxes or a lien.

Why It’s Bad:
You can’t assign a contract you don’t legally control. Surprise issues torpedo deals and ruin your reputation.

Fix It:
Always verify:

• Ownership (Is the seller the actual owner?).
• Liens/Judgments (Use TitleTap or a title company).
• Property Condition (Do a walkthrough or hire an inspector).

Mistake #4: Using Shady or Vague Contracts

What Happens:
You use a free contract template from Google, and the seller backs out—or worse, sues you.

Why It’s Bad:
Weak contracts leave loopholes. You could lose your earnest money or get slapped with a lawsuit.

Fix It:

• Hire a real estate attorney to draft an assignment-friendly contract.
• Always include:
  • Assignment Clause (Your right to sell the contract).
  • Inspection Period (Time to verify the property).
  • Clear Terms (No vague language!).

Mistake #5: Ignoring Local Laws

What Happens:
You wholesale in Texas without a license, not realizing some states require you to be a licensed agent or broker.

Why It’s Bad:
Fines, legal trouble, and even criminal charges in extreme cases.

Fix It:

• Research your state’s wholesaling laws (e.g., Florida vs. Illinois rules).
• When in doubt, disclose you’re assigning the contract (not acting as an agent).

Mistake #6: Not Verifying Seller Motivation

What Happens:
You assume the seller is “motivated” because they answered your ad. Turns out, they’re just testing the market.

Why It’s Bad:
Unmotivated sellers waste your time and kill deals last-minute.

Fix It:
Ask scripted questions:

• “Why are you selling?” (Look for urgency: divorce, job loss, inherited property).
• “What’s your timeline?” (Ideal answer: “ASAP” or “30 days”).

Mistake #7: Underestimating Repairs (Even as a Wholesaler!)

What Happens:
You tell buyers a house needs “cosmetic work,” but they find mold or foundation issues. Deal dies.

Why It’s Bad:
Buyers expect accurate repair estimates. Guesswork erodes trust.

Fix It:

• Bring a contractor to walk the property ($100 well spent).
• Use repair estimation tools like HomeZada or RepairPricer.

Mistake #8: Believing “Motivated Sellers Are Everywhere!”

What Happens:
You blast 1,000 postcards and get zero calls because you targeted the wrong neighborhoods.

Why It’s Bad:
Not all sellers are motivated. Wasting money on bad leads drains your budget.

Fix It:

• Target neighborhoods with:
  • High rental vacancies.
  • Older homeowners (probate/off-market deals). [How to Find Off-Market Deals in 2025]
  • Lots of expired listings.
• Use Virtually Drive 4 Dollars to find distressed properties.

Mistake #9: Ghosting Sellers or Buyers

What Happens:
You stop returning calls after assigning a contract. Buyers feel burned and never work with you again.

Why It’s Bad:
Real estate is a relationship business. Poor communication = no repeat deals.

Fix It:

• Send weekly updates via text or email.
• Use a CRM (like HubSpot) to track conversations.

Mistake #10: Quitting Too Soon

What Happens:
You close one deal, hit a dry spell, and give up—right before a hot lead comes in.

Why It’s Bad:
Wholesaling takes consistency. Most “overnight successes” grind for 6–12 months first.

Fix It:

• Track your metrics (calls made, offers sent, deals closed).
• Celebrate small wins (e.g., locking up your first contract).

Final Tip: Learn from Others!

Want to avoid these mistakes? Steal what works:

• Join wholesaling Facebook groups.
• Listen to podcasts like Wholesaling Inc.
• Partner with a mentor (many offer free coaching).

Liked This Guide?
Share it with your real estate group, and drop a comment below with your biggest wholesaling challenge!