What is real estate wholesaling? In short, wholesaling is the process of finding deeply discounted properties and assigning them to end buyers.
It’s one of the most popular strategies among beginning and experienced investors because it’s a low-risk, high-reward business model. If done correctly, wholesalers can earn a tidy profit without ever owning the property themselves.
Let’s take a closer look at what real estate wholesaling is, how it works, and what you need to know to get started.
What is Real Estate Wholesaling?
Real estate wholesaling is a process whereby an investor finds a deeply discounted property and assigns it to an end buyer. The investor never actually owns the property; instead, they sign a contract with the seller to purchase the property at a later date, usually at a much higher price.
The wholesaler then finds an end buyer who is willing to pay the higher purchase price and assigns the contract to them. The wholesaler makes a profit from the difference between the low purchase price and the higher selling price, without ever having to own or finance the property themselves.
It’s important to note that real estate wholesaling is not the same as flipping houses. Flipping houses refers to the process of buying a property, making renovations, and then selling it for a higher price.
With wholesaling, the investor never actually owns the property; they simply facilitate the sale.
The Pros of Real Estate Wholesaling
1. Low Barrier to Entry
One of the biggest advantages of wholesaling is that it’s a low-barrier-to-entry strategy. Unlike other real estate investing strategies, you don’t need a lot of money or experience to get started.
As a wholesaler, your job is to find deeply discounted properties and then sell them to investors for a profit. You don’t need to put up any of your own money or take on any risk.
2.Quick and Easy
Another benefit of wholesaling is that it’s a quick and easy way to make money in real estate. You can find a property, get it under contract, and sell it in a matter of days.
If you’re flipping houses, it can take months to find a property, renovate it, and sell it. With wholesaling, you can do all of that in a matter of days.
3. No Need for Renovations
When you’re wholesaling a property, you don’t need to worry about making any repairs or renovations. That’s the job of the investor who buys the property from you.
This is one of the biggest advantages of wholesaling. You can make money in real estate without ever having to pick up a hammer!
Downsides of Real estate Wholesaling
1. Requires a Lot of Work
If you want to make money wholesaling, you’re going to have to work hard. You’ll need to spend a lot of time building relationships with real estate agents, looking for properties, and marketing to potential buyers.
2. Requires a Lot of Time
Wholesaling also requires a lot of time. It can take months to find the right property, get it under contract, and find a buyer if you don’t have the right support.
Real estate wholesaling is a process whereby a middleman (the wholesaler) contracts with a seller to buy a property and then finds a buyer for that same property, usually at a higher price than what the seller was willing to accept.
The wholesaler makes money by pocketing the difference between the two prices. Wholesaling requires a good deal of hustle and is not for everyone, but it can be a great way to make money in the real estate market.
Evergreen Investments is a real estate service provider for property owners and investors with industry-leading investment real estate research and world-class advisory and transaction services. Our team provides unparalleled market knowledge, access to hidden investment off-market opportunities, and real estate-related advisory and property support for a lifetime, not just a transaction.
For more information on how to make money wholesaling real estate, contact our team today!