When most people think of wholesaling, they think of stores like Costco, as here you can purchase products in bulk. But there’s wholesaling in the real estate business too. And when you’re doing real estate wholesaling, there may come a time when you need flash funds.
But what is real estate wholesaling, and why is it done? Is it a better way of investing in real estate? To know the answers to these questions, read through the sections below, where we discuss everything you need to know about real estate wholesaling.
What Is Real Estate Wholesaling?
Real estate wholesaling is when a wholesaler buys a contract from a property seller and then sells it to an investor. The first phase in wholesaling is finding a cheap property to put under contract.
Wholesalers often search for distressed homes that are listed at less than market value. These homes typically require significant repairs, and the owners are usually eager to sell and uninterested in working with real estate agents.
Real estate wholesaling may be a great option for you if you want to invest in real estate but you don’t think you have enough money.
How Does Real Estate Wholesaling Work?
Real estate wholesaling is different from other kinds of real estate investing.
For one, most of the properties that wholesalers invest in are older homes that need extensive repairs. They bring these homes up to modern standards so they’re attractive to contemporary buyers.
The key is in finding houses that are listed at below market value. The wholesaler will come to an agreement with the property seller. Specifically, they’ll agree to buy the property for a specific minimum price within a given amount of time.
In the contract, it may be stated that the wholesaler has five months to sell the property for $100,000. The wholesaler will then have to find someone willing to buy the purchase agreement. It’s the goal of the wholesaler to sell the property for more money than what’s specified in the contract. So say the wholesaler is able to sell the home for $150,000 instead of $100,000. They’ll pocket the difference between the selling price and the contract price.
The Bottom Line
Since you don’t have to own property, wholesaling is a terrific way to profit from selling real estate. However, it does demand effort and commitment, and you’ll need to have the right resources to use this business model.
We at Doubleclose.com have walked in your shoes, and we understand the difficulties you may be facing. At DoubleClose.com, we help real estate wholesalers reach their business goals, and we know the ins and outs of double closing.
Author Bio
The author runs a transactional funding service that real estate wholesalers around the nation use every day. If you need to execute a double close flawlessly, they can provide the transactional funding you’ll need. Visit https://www.doubleclose.com/ to learn more.
