Tips from the Practiced Realtor's Spot

Wholesale real estate is one of the quickest ways to earn cash in real estate.

But many people don't know how to earn profits this way. I'm going to show you how.Essentially, wholesale real estate is flipping properties. A typical property flip involves one investor who gets a property at below market value.

Sometimes, that property needs repairs or is sold by a motivated owner. An owner can be motivated to sell for many reasons, but the #1 reason is typically pending foreclosure.

An investor makes repairs to sell the home and sells the property at or close to market value. Profit is always key. The selling price is higher than what the investor paid for the property, along with repair costs.

The term wholesale happens when a wholesale investor purchases a distressed property below market value and makes a profit by reselling at a higher price to a rehabber.

How can you profit from wholesaling? It's actually quite simple. You need to find a property, put it under contract and assign the contract to another buyer who will close on the property. It doesn't matter if you have bad credit. The transaction typically requires very little money down.

How can you find a property to wholesale? Create a "We Buy Homes" ad to attract properties that have equity. You could have many properties to choose from if you place plenty of ads.

You'll get a lot of response from prospects facing job losses, bankruptcy and foreclosure. Some of the properties that come your way may also need repair.

Here's an example. Through your ads, you discover a property that has an after repair value of $200,000. The home is in foreclosure and needs $30,000 worth of repairs. The sellers owe $100,000 and need $8,000 for relocation.

As a wholesale investor, you would negotiate a purchase contract of $110,000 and fulfill the mortgage deficit. Write and/or assigns after your name when writing the contract.

How can you find a buyer? Spend some time thinking about your ads. Pick some suggestive titles that appeal to your market.

Your goal is to attract attention with headlines such as Investor Special, Thousands Below Market Value or Great Rehab Deal. Make sure that you list a sales price with profit for you and the rehabber.

You would wholesale the deal (sell/assign) to a rehabber for $124,000 and make $14,000 in profit. The rehabber will invest the $30,000 for repairs, and they'll still have more than $45,000 profit. It's a win-win for both.

Remember, wholesale investing involves three things: Find a deal. Find a buyer. Let the title company do the rest of the work.

Create A Buyers' List

Compile a list of would-be buyers and rehabbers. This list should come from people you've worked with in the past or folks who have contacted you in the past.

You can compile this list easily by getting the contact information of people who contact you about your properties. Think of this as your list. Find out what types of properties they want and how much they can spend.

Don't stop running your ads after you sell the property. This is a great way to get as many people on your list as possible. When you get a deal under contract, you have a list of potential buyers and their contact information to send information about your deals.

The best thing about wholesale real estate is that you can get quick cash without worry about your credit score or down payments.

Put in the work. Get the right professionals on your team. And wait as you wholesale your way to real estate investing cash.

About the Author:

Joe Dara is an attorney and wholesale investor in Long Island, New York. To learn more about wholesale investing and how you can profit in any market, visit the popular website for wholesale real estate investors at http://www.jdipropertiesonline.com.

Article Marketing

21 people like this article