Real Estate Wholesaling

What is real estate wholesaling? Some people know it as flipping houses, however, wholesaling houses encompasses many aspects of the real estate investing.

Basically, real estate wholesaling is when an investor finds a home seller who is usually motivated to sell a house fast. The wholesaler will then put the property under contract and assign or sell that property to another investor for an assignment fee. Most new investors think that investing is simply buying a house, fixing it up, and selling it. But this is not the best strategy if you are just starting out. Regardless of your chosen strategy the goal is to find properties cheap. That’s why real estate wholesaling is such a great strategy.

Real estate wholesaling is a great way to build income without credit or cash. A real estate license is not required, however, it does take training and knowledge to successfully close a deal. Knowing how to negotiate for a wholesale property and how much to pay for it are just two basic aspects that one needs to master. There is also the dilemma of where to find the properties and where to find your buyers. Cash buyers, or people who buy properties outright without a loan, are essential to this business. A wholesaler is basically a middleman between a distressed home seller and other investors.

When wholesaling houses, keep in mind that you will have to get it for a good price since you are reselling it. That means you never want to negotiate for more than 60% of the value. Your reselling price needs to be attractive to other investors in order to close a deal fast.

Time is of the essence since there is usually a time allowance on the contract. Motivated home sellers who want to get rid of their properties fast are your best option because they will be willing to take less for their house. They will also not want to invest in any repairs to the house, which will give you another good reason to offer less money for the property.

Once you find an appropriate property, it is important in real estate wholesaling to calculate how much it is worth. In that respect, you will have to pull comps (or comparables), just like a real estate agent. When you do this, your goal is to use the lowest comps in the area when presenting an offer to the homeowner, and the highest comps when presenting the property to other investors. When making your offer, be sure to take in the condition of the house and any repairs needed.

If you are just getting started in real estate wholesaling, you may want to consider getting some training. There are experienced real estate coaches who can educate you on all the ins and outs of the business. They may even be willing to walk you through an entire deal for a percentage of the profits. Wholesaling houses can be a great way to make a living if you know what you are doing and it has the potential to give you financial freedom.

If you are considering which strategy to use then real estate wholesaling is one you should definitely consider.

Real Estate Wholesaling