How one real-estate investor went from $400,000 in debt to more than $160,000 of revenue a month

Courtesy of Dan Brault.

In 2016, Dan Brault decided to try real estate.

On nights and weekends, when the Rochester, New York, medical-device salesman wasn't at his day job, he founded a construction company.

Brault, now 31, liked building custom homes so much that he decided to make the work full time. It was lucrative — until a project in 2019 turned disastrous thanks to a poor construction manager, he said. Brault's firm ran out of money. He had to lay everyone off and shut everything down. He said he racked up about $400,000 worth of debt and returned to sales.

Then, in spring 2020, he pivoted back to real estate with a new plan: wholesaling. Brault buys properties directly from distressed homeowners and resells them to investors, landlords, or flippers for a profit.

Just over a year later, business is booming. Brault told Insider his company averages about 10 deals a month. With a wholesaler's fee of about $16,000 a property, he said, pulls in a revenue north of $160,000 a month. Finding sellers is hard, he added, but his profit margin is about 55% — or $8,000 in profit per deal.

"I'd never really liked the process that much, but it was low risk and the margins were really good," Brault admitted to Insider. But then he reconsidered. "Maybe there's just a better way I can do it," he said.

There was.

Brault, who outlined his revamped investment strategy on the "BiggerPockets" podcast this summer, laid out four key ways he's found success wholesaling.

Brault and his team reach out directly to homeowners in hopes of finding ones who need to offload their properties quickly and easily.

"We'll contract to buy their properties, but then before we have to close on the houses ourselves, we basically find another buyer like an investor, landlord, or flipper who wants to buy it from us. And they'll buy it instead," Brault said.

He has a consistent group of buyers he sells about 90% of his deals to, he added. Those buyers have to agree to pay a slightly higher cost than he paid for the wholesaling to work, he said.

For example, Brault said, his company can buy a property for $100,000, but one of their buyers is willing to pay $115,000. Brault will sign a new contract with a new buyer to close on the property. Then, when the buyer pays $115,000, $100,000 goes to original seller and $15,000 goes to Brault.

"It's more or less like a finder's fee," Brault said of the revenue he stands to generate on each deal. "We help homeowners get rid of problem properties and help investors find properties."

Desperate sellers aren't always easy to find, so Brault has to go out and hunt them down.

"Leads are the lifeblood of the business," he said. "To us, a lead is a homeowner who's raised their hand and said, 'Yes, we'd like to sell our property.' And they're a probably candidate for selling off market." 

Two sales representatives and three leads managers assist Brault in making contact with homeowners, vetting them, and gathering information to understand if they are a good fit for the wholesaling process.

A team of third-party cold callers who call and text homeowners help, too, Brault said, adding that the television ads he places are a great source for leads. He also sends handwritten letters directly to homeowners, which he said were very effective.

Most homeowners don't need to sell immediately and forgo the prospective benefits of listing their properties publicly.

"Only between 5 and 10% of people are candidates for what we do," he said.

Since a lot of owners willing to sell to a wholesaler are in debt, Brault said, there can be red flags. They might have liens or judgments against their properties or complicated family situations. Lawyers vet every transaction, he added.

"Having competent attorneys plays a huge role," he said.

Brault has built a team of nine (himself included) in just over a year, hiring his first remote assistant out of the Philippines within his first four months in business.

The staff has now grown to include a chief operations officer and two remote assistants, in addition to Brault, the two sales reps, and the three leads managers.

Affordable remote workers have allowed him to grow fast and sustainably.

"Virtual assistants are a huge resource," Brault said. "So much of what happens in a real-estate investing company doesn't need to be done in person. Back-end work can be done by anyone anywhere."

One assistant handles the dispositions, or sales, of properties: managing how homes are sold once under contract with the original seller, marketing properties and negotiating those agreements, and helping build buyer relationships. The other assistant handles contract preparation, data management, and other administrative work.

The key to wholesaling, Brault said, is creating a business behind finding deals.

"So many people go wrong because they wing it," Brault said. "And something most real-estate investors don't have is the knowledge of how to actually build a business."

The key to running a real-estate business, according to Brault, is having set systems in place and formal processes to follow, Brault said. Understanding metrics and being able to keep steady accounting and track deals are also essential to making sure you're running a healthy operation.

"I'm really happy with where we're at and looking to grow a whole lot more," he said. "So much has happened so quickly. Who would think we'd be at this point?"

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