In real estate investing, there are four key points in making a profit — wholesaling, retailing, lease options or owner financing, rental properties. Among these four, wholesaling can be considered the easiest and fastest way to make money! Let us not forget: Cash is King!
Wholesaling involves finding a bargain property and passing it on to another real estate investor. That investor will either buy and resell the property or buy and hold it.
So why wholesale a property you invested in?
- First and foremost, it’s quick cash! With wholesaling, you’ll be able to make from $5,000 to $20,000 in 30 days or less per property.
- There is low risk and high reward in wholesaling. You do not need to have a real estate license to do wholesaling. Yet you get profit out of it!
- As much as possible, you won’t have to deal with tenants or repairs or holding costs.
- You can do wholesaling as a beginner, intermediate, or experienced real estate investor.
- You might not have as much equity in wholesaling, but equity does not pay the bills and expenses you make. It does not equate to cash, and cash is what we need.
- Your assets are not at risk.
- Wholesaling is great when you’re starting in real estate. At the same time, you can make it into your long-term business!
How Does Wholesaling Work?
First, you find a property. Then you get the property under contract. You then offer the property to your exiting list of buyers. Then you match the buyer and seller and collect the difference between the price you negotiated and the selling price of the property. You will receive a check in 30 days or less each time you match the seller with a buyer.
Basically, this is how wholesaling works.
Finding wholesale deals isn’t that hard. There are a lot of ways to look for them. You can either drive around the area or you can look through tax records to look for properties that you can wholesale. You can also hire a skip tracer and do a private investigation. This way, there’s a chance you’ll come across a property that not all real estate investor has come across yet. And who could forget the Internet? You can look up on eBay for properties on sale.
You should also check up on the properties you found. You don’t want to buy and sell a property in a war zone. You would want a property that is in an area that is up and coming, and accessible to your buyers. Try to check on new properties in the area that might prove to be a good property for wholesaling, too.
Remember that in selling a property, you would want to offer a good deal for you buyers. If it’s going to have your name on it, you would want it to be a good deal for the sake of your business.
Properties you can wholesale include single family homes, multi-family homes, commercial properties, and lots and land.
Next stop is your buyers list.
Your buyers list is your most important asset when you’re a real estate investor. In keeping your business up and going, it’s good to have repeat customers. Having buyers ready enables you to work faster, harder, and smarter. Your customers will tend to expect better deals form you and you will be motivated to give them the best.
You can find your buyers through many ways. The most commonly used ones are advertisements and signs. You can also look them up on your Real Estate Investor Association or look up on the Web. Craigslist is a good source when looking for buyers.
Create a System!
If you want to be successful on wholesaling, it may not be enough to do what you think should be done as the deal progresses. It is important to have a system for you to use and implement over and over again
The system you create would naturally consist of these steps:
- Finding deals
- Screening the deals
- Estimating repairs
- Building a team
- Finding buyers
- Construct and present offers
- Follow up on the deals
- Selling quickly
Nevertheless, it is going to be how you go about these steps that will make up your own system. And it is going to be your system that’s going to determine if you succeed in real estate or not.