- Real estate investor Todd Baldwin generated more than $1.5 million in 2021 from various sources of revenue.
- He recently got into the wholesale business, which he says is one of the most effective ways to make money.
- In his latest deal, the seller wanted $800,000 for his home. Baldwin sold it for $900,000 and kept the difference.
For Todd Baldwin, time is the most valuable asset.
“I’m excited about freedom with my time,” the 29-year-old Seattle-based investor told Insider. “And because we live in a market economy, and you need money to do pretty much everything, it makes sense to work for much larger amounts for much smaller periods of time.”
That is why he has recently started selling real estate in bulk. It’s one of the most effective ways for him to make money, he said, “In terms of dollar bills, I’ve found nothing better for me than wholesaling real estate.” Baldwin has a diverse set of revenue streams, which all earned him more than $1.5 million in 2021.
The way it works is for a wholesaler to enter into a contract on a house or plot, find a buyer – usually a real estate investor – willing to buy it at a higher price, and pocket the price difference. Once the deal is closed.
For example, the last deal Baldwin made in May 2022, the seller wanted $800,000 for his property. He didn’t want to be listed on Redfin or Zillow, dealing with open houses and real estate agents, and losing sale money on agent fees. Instead, he wanted to do what’s called an out-of-market deal – and reached out to Baldwin to execute it.
explained Baldwin, who ended up selling the contract on a house for $900,000 and a profit of $100,000. Insider verified the sale by looking at the seller’s statement.
“I tracked my watches all the way because I wanted to calculate my hourly rate,” he added. “It took exactly 47 hours of my time.”
Earning $100,000 over 47 hours The hourly rate is $2,128.
He indicated that he would have to pay taxes on his earnings: “Oh my God
As for earned income it’s 40%, so in theory I’d owe $40,000 in taxes. “He’s going to put $40,000 on taxes, but he’s looking for ways to lower his tax liability. He might buy an electric truck (either a Ford F-150 Lightning or Rivian), for example: ‘As long as I use it for business 51% of the time, I can get 100% additional depreciation. The trucks cost about $100,000, so if I bought them, it would eliminate my tax liability for this transaction. In other words, he can either buy a $100,000 ‘business truck’ and not pay any taxes, or he can pay $40,000 in taxes on a wholesale deal and we have $60,000 left to invest.
The 47 hours he spent working on the deal included everything involved in the process from start to finish: marketing the property, talking on the phone with potential buyers, taking walks, driving to and from the aisles, and putting the contract together. Wholesaling can also include vendor sourcing, but in this case, contact the seller with Aldwin.
To market the property, he recorded a video of the space and emailed it to his network of nearly 15,000 real estate investors in the Pacific Northwest.
“To be efficient, I use an email template with links and images,” he said. “I just change the name of the person I’m sending it to, and then I can send it to the whole list. It’s the use of systems and automation that helped me limit it to those 47 hours.”
Of the thousands of people he reached out to about the property, about 100 followed up, saying, “Out of the 100 who wanted more information, three people actually wanted to go for a tour of the property, so I took the tours to three people. I arranged the tours back-to-back. All in one day, to be as efficient as possible.”
One of these three ended up doing an offer before Baldwin accepted.
As for writing the deal contract, Baldwin did it himself using LegalZoom which allows you to create legal documents without necessarily having to hire a lawyer. He said, “I found a form on LegalZoom which is exactly what I needed. It took me maybe 12 minutes to write the contract.” “And I didn’t even pay for it. I used a free trial and then canceled it.”
Then use the free version of DocuSign to perform the contract. “I wrote the contract for free on LegalZoom and had the buyer sign it for free with DocuSign, so my expenses were all zero – except for the gas I spent to drive to the property for shows.”
How to start wholesale
If you’re starting from scratch, Baldwin says, you first need to understand exactly how wholesale works. Educate yourself about the topic by reading books, taking an online course, or watching YouTube videos.
Next, you have to start creating a list of potential buyers. After all, once you contact a person who wants to sell their property, you need to find someone to buy it.
Join real estate investment groups on social media in your area,” said Baldwin, who is a member of several Seattle investment groups on Facebook. Within these groups, I will post, ‘Who cares about buying off-market property? “And over the past three years or so, a legitimate buyers list of about 15,000 investors has grown.”
Do a Google search to find a community in your zip code and start attending local real estate meetups. It will help you build your network and meet some of the active buyers in your area. Additionally, you can reach out to other wholesalers or people who already do what you want to do, and ask them how they got to where they are.
When you are ready to try out your first deal, you need to find a seller, which includes making cold calls. That’s what Baldwin had to do on his first trade – and probably what any newbie should do.
Cold calling can be uncomfortable at first. Baldwin had experience from his first paying job. After he left college, he said, he started working in insurance sales and had to make “a hundred cold calls a day.” “So I’m very used to picking up the phone and calling a complete stranger.”
In this scenario, he was inviting land owners, specifically those who list their properties for “for sale by owner” (FSBO). He said you can find FSBO listings on Craigslist and Zillow.
He remembers his first wholesale deal in October 2021: “I just picked up the phone and started calling.” “It didn’t take long—five or six phone calls—to get someone interested in making me sell.”
The seller wanted $750,000 for the property, and Baldwin found a buyer who took it for $800,000, and made $50,000 in about four hours of work, he said.
Compared to his other revenue streams — rental income, consulting calls, and earnings from his online real estate course and YouTube channel — wholesaling is probably the most effective way to make money, he said, “I found something with which I could leverage my skill set and network, and make dozens of Thousands of dollars with the least amount of work possible.”
He added that it’s something anyone can do with the right knowledge and network: “There are jobs that pay $30,000 a year that I don’t qualify for because I’m a college dropout. However, I can make $100,000 in one week doing my own thing. It’s a great use of my time, and that’s what I enjoy doing it, and it diversifies the income.”
Baldwin plans to devote more time to wholesale in the near future. If he keeps doing it alone, without hiring a team, he thinks he can realistically make one deal per month, or 12 deals per year.
He said, “I’m going to keep doing this for as long as I can, it’s a great way to make extra money – really big money too – and for minimal work. It comes down to big amounts of money in short periods of time for me.”