Tresa Todd figured she'd be able to retire comfortably after a decades-long career in the medical industry.
She'd been working for an ophthalmologist in Tyler, Texas for 25 years and consistently contributing to her retirement account, she told Insider: "I was putting the most amount of money in my 401(k) that I could. I lived within my means. I didn't have a lot of debt, so I just assumed I was going to be okay."
It wasn't until one of her sons asked to look at her finances that she realized she might not be as financially prepared as she thought. After looking at her savings and cost of living, "he told me, 'Mom, do you know that if you work until you're 65, with what you have, you could live a decent life for about seven years and then you would be out of money?'" she said. "That was super scary and a real eye opener."
Todd needed to make a change.
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Encouraged by her three sons who had been investing in Dallas real estate and offered to mentor her, she sold her house, quit her job, and moved to Dallas.
Getting started with real estate wholesaling
When Todd moved to pursue real-estate investing, she didn't have a ton of savings she could dip into, so her sons recommended she start with wholesaling.
The way wholesaling works is, the person acting as the wholesaler (in this case, Todd) 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.
"The end buyer brings all the money to the table, so you don't have to have any money; you just get it under contract and sell the contract," explained Todd. It can be an effective strategy for beginner real-estate investors looking to break into the industry since it doesn't require upfront capital.
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To execute a wholesale deal, you first need to find a property to sell. Then, you need a buyer.
Todd's sons taught her to reach out to people who were in some sort of crisis situation and could benefit from selling their homes, she explained: "We market to someone who might be facing a foreclosure. Or, someone who inherited a property that they can't afford to keep, and they don't have the time or the resources to fix it up and sell it."
With some legwork, you can find foreclosures or properties on the brink of foreclosure by searching public records, checking real estate auction websites, browsing the HUD Home Store, and even reading local newspapers.
"We are always looking for off-market properties," noted Todd. "We're not buying properties off the MLS with the realtor and paying top dollar. We would never make any money that way."
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Todd came up with a list of properties in her area and then went door-to-door.
"Reach out in whichever way feels the best to you — you can send letters, do cold-calling, email campaigns, door knocking like I did — and just let them know how you can help them," she said.
She would show up prepared, knowing exactly when the foreclosure date was.
"I would literally say, 'Hey, my name is Tresa. I know your home is going into foreclosure and I would love to talk to you about how I could keep that foreclosure from showing up on your records, put some cash in your pocket, and help you to get a fresh start. Let's get you out of this house and get you into something you can afford.' I just found that those were the magic words."
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Todd had plenty of time to refine her pitch.
"I knocked on 57 doors before I got my very first deal," she said. But that first deal resulted in a $20,000 profit, which was about one-third of what her annual salary had been.
She continued knocking on doors and focusing on wholesale deals — and she continued profiting.
"I made more money in the first four months of real-estate investing than I had in my 401(k) after 25 years," said Todd, who eventually started flipping homes and purchasing rental properties. "I never dreamed that somebody without any experience — and I didn't have a big stash of money somewhere to get started — could do that."
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The second piece of the wholesaling puzzle involves finding an interested buyer, which typically boils down to networking with other investors.
"You usually find that end-buyers are other investors like myself," said Todd.
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.
Strategies like wholesaling are beginner-friendly ways "to start putting money in your pocket," said Todd, who now teaches other women how to build wealth in real-estate investing through the Women's Real Estate Investors Network (WREIN) that she founded in 2018.
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She's moved on from wholesaling and is now more focused on investing in rental properties, which she believes is the most effective strategy to creating long-term wealth.
With rental properties, "you get monthly cash flow," she said. "That's money that you can use to pay a bill or go on a vacation or save."
In addition to generating cash flow, "these properties can appreciate," she said. "As you pay down that monthly mortgage, these are properties that you can sell when you're ready to retire or pass down to your children and your children's children — and that's building generational wealth."
