Wholesale real estate simply involves finding a real estate deal and selling it to investors. This process allows you to avoid any potential risk associated with the deal and not hold up your capital for the period of the transaction. With wholesale real estate, you provide an ease of entry to the real estate business, though it doesn’t guarantee success. You need a baseline of knowledge about wholesale real estate for beginners. Without this information, you could end up on the losing side. Here are some of the things you need to know before you invest in wholesale real estate.
What Is Wholesale Real Estate
One of the most common questions we often get asked is: What Is Wholesale Real Estate? This is a real estate investment strategy that involves wholesalers finding discounted properties. They find the houses and put them under a real estate contract with the home seller. Then, they find a real estate investor that is interested in the house and sells the contract to them for a fee. The interested investor will take the property, make the necessary upgrade, and either rent it out or sell it for a higher price.
How Does Wholesale Real Estate Works?
The real estate investor starts a contract with an interested investor. Generally, the home sellers may be motivated to sell a distressed home as quickly as possible at be at risk of foreclosure and don’t care about repairing the property. The real estate investor or wholesaler then looks for interested investors with cash that are willing to fix the property or have the resources to get someone to do it.
The real estate investor sells the property contract to the investor for a particular fee agreed upon by both parties. Keep in mind that when the investor sells a contract, they are not essentially selling the real estate itself; they are actually selling their right to someone else.
The Benefit of Wholesale Real Estate
Wholesale real estate has many benefits. For starters, you will only have to commit little to no money for the deal. You can completely negotiate with the home seller, and it might not cost you more than a few hundred dollars, which can be afforded by almost anyone. Also, you don’t have to worry about securing financing for the real estate deal.
Unlike traditional real estate transactions, you don’t have to go through the lengthy and stressful process of working with mortgage lenders to get the loan you need to secure the property. In addition, you don’t have to worry about doing repairs or maintenance on a property because you are not technically the owner of the property. So, wholesaling real estate is as clean as a deal can get.
Ready To Get Started With Wholesale Real Estate?
Wholesale real estate is one of the best real estate strategies that can help familiarize you with the real estate industry. To learn more about wholesaling, you can attend the online real estate class hosted by Real Estate Disruptors. So if you are considering real estate investing, contact us today.