Wholesale Real Estate
You need a lot of time and financing to make a mark in the real estate world, that’s when everyone thinks. What they don’t know is that with wholesale real estate, they can start out in the industry with a little amount of money.
Wholesale real estate is a new concept and for those who don’t know, here is a complete guide to it.
What is wholesale real estate?
Wholesale real estate is the quickest way to turn a profit in the real estate market using which you find a discounted property that is up for sale, enter into a contract with the seller and then sell it to an investor for a higher price. This way, you only spend what you can spare and upon selling the property to an investor, make higher profits.
How does wholesale real estate work?
Wholesaling in real estate is divided into three steps. In the first step, you will have to find a property that the seller is willing to sell at a lower-than-market price. The seller might be doing so because the property is nearing its foreclosure or for any other reason. After that, you create a contract with the seller and start looking for an investor and in the last step, you sign off the property to an investor for a higher price making huge profits in the process.
How to get started as a real estate wholesaler?
Here is a step-by-step guide to getting started as a real estate wholesaler.
- Do your research
Before entering into wholesale real estate, you need to know the ins and outs of this market. Familiarize yourself with the process of wholesaling properties and the prices of properties in your locality. Determine what your short-term as well as long-term goals are regarding this mode of real estate.
- Find a real estate niche for yourself
Real estate offers you different options to start your wholesaling career. You need to decide whether you want to wholesale homes, vacant land, or rental properties. Although you can do all at the same time, it is preferred to start with one, gain experience, and then scale up your practice.
- Secure financing
Even though you don’t need a lot of money to start your wholesale real estate career, you still need some. Marketing and tools can help you attract sellers and investors and you will need money to use them. Go into your savings, take a loan out, or find an angel investor to secure financing.
- Find a distressed seller
Different sources such as Multiple Listing Service (MLS), real estate auction and foreclosure websites, and social media can help you locate a distressed property. If you come across such a property, you will need to contact the seller and you will need their contact information for that. REI skip tracing can help you retrieve that information easily.
- Create a contract
As soon as you find a seller that wants to sell the property for a discounted price, you need to make an offer keeping in mind the profit margins for yourself as well as the investor to whom you will sell it. Create a legally binding contract and move on to the next step.
- Find a buyer
Finding a buyer is not easy but it can be made easy if you use the right means. You may find an investor in your friend circles, family, social media, or anywhere online. As soon as you find one, present them with the contract, and if they agree to take the property off your hands, close the deal.
REI skip tracing can help you find both distressed sellers as well as interested buyers. This is why you need to include skip tracing in the list of tools you will be using to strengthen your portfolio.
