Wholesaling real estate
Wholesaling real estate term that involves the buying of a house at a cheap price and selling it to a investor at a profit. This term may also be called wholesaling Flipping and it is considered to be the foundation of any real estate investment. This is because when it is done right, there can be no capital required and no risks involved. Wholesaler puts properties under contract and resells or reassigns the same property to another investor. In wholesaling real estate, the wholesaler does not normally buy the property, but they place the property under contract with contingency with focus to quickly selling the property at a profit to the investors. In the event that you may not have sold the property before the closing period, the wholesaler can utilize the contingency clause and work himself out of the contract.
Wholesaling provides you with an opportunity to generate income using little credit or capital; it does not require a license because you have an equitable in the property. Transactions in wholesaling property can be carried out in credit lines, hard-money loans or cash; this will facilitate faster and efficient closing especially for those properties that require extensive repairs. Wholesaling real estate works best if the property or the home owner is distressed. Wholesaling real estate is a very lucrative offer because one can make a lot of money in a short span of time. Wholesale real estate just appears as a middle man who link the seller or the homeowner. According to the wholesaler, the cardinal Principe is that price can overcome all objections. The middleman can sale the property at a cheaper price as long as he can make few profits. The main work of the wholesaler is to find the deals and create a network of investors. Wholesaling is often carried out in a reverse manner where the buyer first gets the property and establishes its state and chooses the one that can suits the seller. He buys them at a market value and sell it at a price below the market value. This will guarantee him maximum returns.
During the wholesaling of a property, there is no money required because it involves selling the contract before the property. For an individual to begin the wholesaling of real estate, you need to look for cheap properties and get them into contract before they are sold quickly before the expiry of the due diligence period. The property is sold to an end investor who can either rehabilitate it or rent it out. There are various step that are involved in the wholesaling of real estate, these are:
Step 1: Finding wholesale properties
There are various ways of finding out dirty cheap properties. These properties may be: Foreclosures or bank owned properties, short sales, distressed sellers (Absentee owners, probates, tax liens and code violations) and auctions. The property should have sufficient equity and once you find it, fill the sales contract with yourself as the owner and the homeowner as the seller. A 10% deposit should be left with the homeowner during the time of contract signing in order to make it binding.
Step 2: Getting leads to call you
in real estate, it is advisable to have dedicated sellers who can call you than the buyer chasing or calling motivated sellers. This is because, when an individual (sellers) are asking you to buy their house, it is an indication that they really want to sell the house an you will be in a more powerful bargain position since they are asking for your help.. Initial calls only come when you set up bandit signs. When the investors begin calling, take down their personal information and place it on the data base.
Step 3: Looking for cash buying investors/Negotiate a deal
This is the most complicate part where you will be looking for investors for the wholesale deals. The simplest way of getting investors is to call landlords for the subject property. You should introduce yourself, tell them that you have property for sale in a specified location and tell them their return investment.
Step 4: Closing
When you are wholesaling real estate you need to have a title company or an attorney who can close the deal. Closing should be done using a title company that is investor friendly
