- Real estate investor Todd Baldwin made over $1.5 million in 2021 from various revenue streams.
- He recently got into wholesaling, which he says is one of the most efficient ways to make money.
- On his last 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 passionate 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 pretty much do everything, it makes sense to work for much larger sums of money for much smaller amounts of time.”
That’s why he recently started doing real estate wholesaling. It’s one of the most efficient ways for him to make money, he said: “As far as number of hours worked in exchange for dollars, I haven’t found anything better for me than wholesaling real estate.” And Baldwin has a variety of revenue streams, all of which earned him more than $1.5 million in 2021.
The way it works is, the person acting as the wholesaler enters into a contract on a home or piece of land, finds a buyer — typically a real estate investor — willing to purchase it at a higher price, and then pockets the difference in price once the transaction closes.
For example, the last deal Baldwin did in May 2022, the seller wanted $800,000 for his property. He didn’t want to list it on Redfin or Zillow, deal with open houses and real estate agents, and lose money on the sale to agent fees. Instead, he wanted to do what’s called an off-market deal — and he reached out to Baldwin to execute it.
“We agreed that if I could sell it for above $800,000, I’d just make whatever the delta was: So if I sold it for $825,000, I’d make 25 grand,” explained Baldwin, who ended up selling the contract on the house for $900,000 and profiting $100,000. Insider verified the sale by looking at the seller’s statement.
“I tracked my hours all the way through because I wanted to calculate what my hourly rate was,” he added. “It took exactly 47 hours of my time.”
Earning $100,000 over the course of 47 hours comes out to an hourly rate of $2,128.
He’ll have to pay taxes on his earnings, he noted: “My
for earned income is 40%, so theoretically I’ll owe $40,000 in taxes.” He’ll set aside $40,000 for taxes, but is looking into ways to bring that tax liability down. He might buy an electric truck (either the Ford F-150 Lightning or the Rivian), for example: “As long as I’d use it for business purposes 51% of the time, I can take 100% bonus depreciation. The trucks are about $100,000 so if I buy it, that would eliminate my tax liability for this deal.” In other words, he can either buy a $100,000 “business truck” and pay no tax, or pay $40,000 in taxes on the wholesale deal and have $60,0o00 leftover to invest.
Included in the 47 hours he spent working on the deal was everything involved in the process from start to finish: marketing the property, talking on the phone with potential buyers, doing walk-throughs, driving to and from the walk-throughs, and putting the contract together. Wholesaling can also involve sourcing a seller but, in this case, the seller reached out to Baldwin.
To market the property, he recorded a video of the space and emailed it to his network of approximately 15,000 real estate investors in the Pacific Northwest area.
“To be efficient, I use an email template with links and photos,” he said. “I just change the name of who I’m sending it to, and then I can send it out to the whole list. Using systems and automation is what helped me limit it to those 47 hours.”
Of the thousands of people he reached out to about the property, about 100 followed up, he said: “Out of the 100 people that wanted more information, three people actually wanted to go take a tour of the property, so I gave tours to three people. I lined the tours up back-to-back-to-back, all in one day, to be as efficient as possible.”
One of those three ended up making an offer that Baldwin accepted.
As for writing the contract for the deal, Baldwin did it himself using LegalZoom, a site that allows you to create legal documents without necessarily having to hire a lawyer. “I found a template on LegalZoom that was exactly what I needed. It took me maybe 12 minutes to write the contract,” he said. “And I didn’t even pay for it. I used a free trial and then I canceled it.”
Then, he used the free version of DocuSign to execute the contract. “I wrote the contract for free on LegalZoom and I had the buyer sign it for free with the DocuSign, so, all in, my expenses were zero — except the gas that I spent to drive to the property for showings.”
How to start wholesaling
If you’re starting from scratch, you first need to understand exactly how wholesaling works, Baldwin says. Educate yourself on the topic by reading books, taking an online course, or watching YouTube videos.
Next, you need to start building a list of potential buyers. After all, once you connect with someone who wants to sell their property, you need to find someone to buy it.
“Join real estate investing groups on social media that are in your area,” said Baldwin, who’s a member of several Seattle-specific investing groups on Facebook. “Within those groups, I’ll post, ‘Who’s interested in buying properties off-market?’ And over the past three years or so, I’ve grown a legitimate buyer list of about 15,000 investors.”
Do a Google search to find a community in your zip code and start attending local real estate meet-ups. It’ll help you build your network and meet some of the active buyers in your area. Plus, you can connect with other wholesalers or people already doing what you want to do, and ask them how they got to where they are.
When you’re ready to try your first deal, you need to find a seller, which involves cold-calling. That’s what Baldwin had to do for his first deal — and likely what any beginner will have to do.
Cold-calling can be uncomfortable at first. Baldwin had experience from his first paid job. After dropping out of college, he started working in insurance sales and had to make “a hundred cold-calls a day,” he said. “So I’m very used to picking up the phone and calling a complete stranger.”
In this scenario, he was calling landowners, specifically those listing their properties “for sale by owner” (FSBO). You can find FSBO listings on Craigslist and Zillow, he said.
“I just picked up the phone and I started calling,” he recalled of his first wholesale deal in October 2021. “It didn’t take me very long — five or six phone calls — to get someone who was interested in having me sell.”
The seller wanted $750,000 for the property, Baldwin found a buyer who took it for $800,000, and he earned $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 perhaps the most efficient way to make money, he said: “I’ve found something where I can leverage my skill-set and my network, and make tens of thousands of dollars with pretty minimal work.”
It’s something that anyone can do with the right knowledge and network, he added: “There are jobs that pay $30,000 a year that I do not qualify for because I’m a college dropout. And yet, I can go make $100,000 in one week doing my own thing. It’s a phenomenal use of my time, it’s what I enjoy doing, and it diversifies my income.”
Baldwin plans to dedicate more time to wholesaling in the near future. If he continues doing it on his own, without hiring a team, he thinks he could realistically do one deal a month, or 12 per year.
“I’ll continue doing it for as long as I can,” he said “It’s a great way to make extra money — really big money, too — and for very minimal work. It’s about large sums of money in small amounts of time for me.”