How to Wholesale Real Estate the Honest Way￼
Sometimes, a real estate wholesaler will have a distressed real estate property under contract so he can assign it (the contract) to another buyer. The intention of the wholesaler is not to sell the property or fix it but to market it to other potential buyers.
Wholesaling Real Estate in 7 Steps
This investment strategy is a short-term one. It is not the same as fixing and flipping. Wholesaling is ideal for new investors who may not have enough capital. It can, however, be difficult because of complicated contracts and legality.
Look for a Distressed Property
Wholesaling is better with distressed properties because you can sell them under market value. These include properties whose owners are looking to sell quickly or those that are in disrepair.
People love wholesaling due to the low capital required to start. Therefore, it makes sense to find inexpensive or free ways of looking for distressed properties. Other means are ideal for veteran investors. They include:
- Real estate investment groups and real estate wholesale groups
- Wholesale real estate sites
- Hiring a property finder
Make an Offer to the Owner and Convince Them to Sell
After finding a great property, you need to convince the owner to sell. Assuming you are not a seasoned real estate professional, you must make the homeowner trust you. Next, tell them the benefits they will reap if they sell the home to you. Finally, use legal help for signing the contract or draw one yourself.
Look for a Title Company, Contractor and Appraiser
As a new real estate wholesaler, you require an appraiser, a contractor, and a title company on your team. They will increase your team’s professionalism and make your transactions smoother.
An appraiser is responsible for giving you appraisals for properties. A title company ensures your buyer of the legitimacy of your company. A contractor helps with anything that pertains to the condition of the property.
Assess the Renovation Needs of the Property
When you know what renovations are required, you can estimate the cost and you can know how you will make a profit. Your contractor will give you an estimate of how much the repairs may cost, and you will, in turn, make them known to the buyer.
Find a Buyer
You will not be selling to a family or homeowner but to a contractor or investor. This is how you can find buyers:
- Websites such as Zillow and Craigslist
- Email investors
- Distribute flyers
Negotiate a Deal
Negotiating with a buyer is very important. It will determine your profit. Let them know that there are other interested buyers and time is not on their side. The amount you settle on should cover all your costs and you make some profit.
Close on the Wholesale Property
This process lasts for about 90 minutes and it takes place at the office of the title company. All involved parties come together, and the deed is given to the new owner.