What Is Wholesale Real Estate? And Is It Right For You?
Published by
Click here to browse our Real Estate Agent Directory and contact top-rated agents in your area!
What Is Wholesaling Real Estate?
Wholesale real estate is a type of real estate investment strategy where an investor seeks a distressed property, enters into a contract to acquire the property from the seller, and then sells the contract to another end-user or investor for a profit.
The wholesaler acts as a middleman between the seller and the end-buyer but does not typically purchase or intend to keep the property for themselves. Instead, a wholesaler uses negotiation skills to obtain the property at a reduced price and then sell the contract to the end-buyer for a higher price. This typically happens with an assignment fee.
From there, the end-buyer then takes over the contract for the property and completes the purchase. You will find that these end buyers may be landlords or fix-and-flip investors, which is good to note.
Real estate wholesaling can be a quick and profitable method to generate money. Still, it demands a solid grasp of the market, negotiation skills, and the capacity to locate eager sellers and end-users.
How to Get Started Wholesaling Real Estate
Now that we have a grasp of what wholesaling real estate is, let’s dive deeper.
1. Research Your Market
The first step you should take when discovering a new path is to research, research, research.
The better prepared you are, the more effective.
Start by familiarizing yourself with the real estate market and the process of wholesaling houses.
Analyze your market data by gathering housing trends, including the days the property has been on the market, the number of homes for sale in your target area, and the average price of homes around your property of choice. You may use efficient tools such as the MLS, Zillow, or Redfin to access this information.
Another area to investigate before getting started is the local laws and regulations. It is important to be aware of these just in case they may impact your ability to wholesale houses in a given area. Some states may have specific laws to wholesale, so make sure you take a quick look at that information.
You may also want to understand your target buyer to identify who your ideal end-buyer would be, along with what type of properties they are looking for. This may increase your chances of a successful transaction and can help you identify properties that will be attractive to them.
By thoroughly understanding the market, laws and regulations, and your target end-buyers, you may find it easier to identify potential opportunities and make informed decisions regarding your wholesaling journey.
2. Find A Mentor
To be successful in the real estate business, you need to network. Networking is a critical aspect, and putting yourself out there is an important step to securing deals.
While this is also advice that you can take into flipping houses, rental properties, and more to increase your exposure, networking is especially essential when wholesaling.
Build relationships with real estate agents, brokers, and other real estate professionals in your area to provide insightful information to your market and guide you to potentially hone in on some deals.
Great wholesale deals are hard to find, so having a good contact on your phone is the best way to navigate this process. Some of your best wholesaling deals may be through word of mouth from your contacts.
Building this networking list can be challenging and takes a lot of dedication and time, but ultimately will generate the best results.
Another great option to find a mentor is through local real estate events such as meetups, conferences, and investment clubs to connect with other investors and get their insights on the market.
Furthermore, you could join a real estate education platform like the Pro Wholesaler Vip Program to find mentors, like-minded individuals, and students to ultimately connect you to the real estate industry and guide you through the wholesaling process.
3. Keep An Open Mind
Throughout the entire process, remember to keep an open mind.
Wholesaling houses is a great way to jump-start your career in real estate, although if you don’t put in the work, it won’t work for you.
Keeping an open mind when wholesaling houses can help you stay adaptable, creative and flexible in this dynamic market, which can lead to your overall greater success.
As long as you are determined to put the work in and be open to learning, you have high potential when it comes to wholesaling.
Final Thoughts
The bottom line is you don’t need an abundance of capital to invest in the wholesaling business.
This is an excellent opportunity to build your network and step into new territory. By researching your market, building your network out, and keeping an open mind, you can help ensure your wholesaling efforts are successful.
