Wholesaling Real Estate
Real Estate is a great opportunity and I would encourage people to consider it as one of their investment strategies. I personally use several different strategies, but here I want to talk about one I don't directly use at least not much anymore. It is Wholesaling, or sometimes referred to as contract flipping. I don't personally use this method but I do use wholesalers to get deals so I know that the method is real. It is a great way for early investors to get involved with real estate.
Benefits of Wholesaling Real Estate
If you have read about making money in real estate with no money and no credit you probably have read or heard about flipping. It might have come across as scammy or maybe you thought it really cant work like they are claiming. How can someone buy real estate with no credit and no money, this is crazy. Well I'm telling you its not. There are multiple ways to do this but wholesaling is probably one of the most common. You can buy properties paying very little money. Im not talking about borrowing from someone for your down payment either -Thats another strategy which I sometimes use still -. You can literally get involved with very little money period.
The basics of Wholesaling
This is the general idea -ill add subpages to go more in depth as this guide progresses- A wholesaler is in the business of flipping contracts. They are connecting motivated sellers with cash buyers. It is not done by brokering like a real estate agent would do. You as the middle buyer are actually making a contract to buy the property from the seller. Then you sell your interest in the property whether you sell your contract or do what would be called a double escrow or simultaneous close. Depending on your state and excise or sales tax rules you might consider one over the other. -more on that later-.
I don't necessarily do wholesaling myself but I do have multiple wholesalers that I have networked with. They get a hold of me when they get a great deal.. My part is to close the transaction as the end buyer, with cash or a partners cash. That is how the wholesaler ends up getting paid, through their markup of the house or their assignment fee. The technique really works and as long as the wholesaler has a good buyers list and is finding good deals -they are always out there in all economies- they will be able to make some good money in real estate without risking their own money, and eventually use their profits to move to another method.