The Process of Wholesale Real Estate
Did you know that you can start wholesaling with just a small amount of money?
There's a lot of talk in the real estate world about wholesale deals. But what, exactly, is wholesale real estate? And how can you get involved in it?
In this blog post, we'll discuss the basics of wholesale real estate and show you how to get started in this exciting industry!
What is Wholesale Real Estate?
Wholesale real estate is finding deeply discounted properties and then selling them to investors for a profit. It's a business model that can be done with very little money and no credit, and it's one of the quickest ways to get started in real estate investing.
How Does Wholesale Real Estate Work?
The key to successful wholesale real estate is finding properties sold by motivated sellers. These people typically need to sell quickly for one reason or another, and they're often willing to accept a deeply discounted price to do so.
Once you find a motivated seller, you'll need to make an offer on the property. If the seller accepts your offer, you'll then need to find an investor to buy the property from you. This is usually done by finding a buyer interested in fixing and flipping the property.
How to Become a Wholesaler: A Step by Step Guide
Now that you know a little bit more about wholesale real estate, you might be wondering how you can get started in this exciting industry. Here's a quick step-by-step guide:
Step One: Set Your Goals
The first step is to set your goals. What are you looking to achieve by wholesale real estate?
Do you want to quit your day job? Make some extra money each month? Build up a long-term portfolio of rental properties?
Once you know what you want, you can start working towards it. Use the 1-5-10 year goal-making formula.
For example:
In one year, I want to be making $2000 extra each month from wholesale real estate.
In five years, I want to have a portfolio of 20 rental properties.
And in ten years, I want to retire and live off my rental income.
Step Two: Find Your Niche
The next step is to find your niche. This is the part of wholesale real estate that you're most passionate about.
Do you want to focus on finding properties for house flipping? Or do you want to work with landlords and build a rental portfolio?
While most wholesaling does not include land or tax liens, there are ways to go about it. Most wholesalers prefer working with houses rather than vacant land.
Maybe you're interested in tax liens or vacant land, but it is best to start wholesaling homes as a beginner.
No matter what you're interested in, wholesale real estate has a niche for you.
Step Three: Get the Money
The third step is to get the money. You'll need some money to start, even though it isn't a lot.
Of course, you won't purchase the house, but you will need to spend some money to develop a marketing strategy. Some great tools can help you get started, so it's important to have a little cash in your back pocket.
There are a few ways to get the money you need:
- Use your savings
- A loan from a bank
- Find private investors to fund your deals
Once you have the money, you're ready to start wholesaling!
Step Four: Find Motivated Sellers
There are a few ways to find motivated sellers:
You can drive for dollars and look for properties that appear to be vacant or in disrepair. When you drive for dollars, you look for particular items in houses.
For example, most wholesalers are looking for houses that are in disrepair, vacant or have gone through a foreclosure.
These owners are looking to sell their property fast and often for a steeply discounted price. However, they are having issues finding a buyer. This is where you and your expertise come in.
When looking for sellers, you will need to find their names, social media handles, and any other form of contacting them. Using an app such as REISkip, you will find all the information by just filling out the address.
You can search online listings for properties sold by motivated sellers. Or you can work with a real estate agent to find properties.
Pro Tip: Use the REIRail App to track your route when driving for dollars. It integrates perfectly with the skip tracing app we provide to find contacts, mortgage info, and property characteristics!
Step Five: Make an Offer
When a wholesaler is looking to make an offer on a property, they have to consider several factors to ensure that they are making a profitable offer.
The first and most important factor is the contract. The contract needs to be drawn up so that it protects the interests of both the wholesaler and the end buyer.
The second factor is the price. You need to offer a low enough price that the end buyer will be able to make a profit on their rehab but still high enough that you will be able to make a profit too.
To calculate this, you need to understand both the property market and the costs associated with rehabbing the property.
Once these two factors have been considered, you can start drawing up a contract!
Step Six: Find an Investor
The final step is to find an investor. This is usually done by finding a buyer interested in fixing and flipping the property.
You can find investors through your network of friends and family or search for them online. Once you find an investor, you'll need to present them with the contract. Then, if interested, they'll sign the contract and buy the property from you.
Max Maxwell: A Success Story
If you are still wondering if wholesaling is right for you, perhaps look at Max Maxwell, who climbed his way up from the bottom and is not a successful real estate investor and coach.
He started with only $300 in his bank account and now has one of the most successful real estate companies. In fact, he used skip tracing to find his first deal! His company generates millions now, and he is still growing!
Do you know how he did it? Wholesaling. From one deal to another, he built his empire and generated an income that allowed him the freedom we all wanted.
Start Wholesaling with REISkip Today
Now that you know the process of wholesale real estate, it's time to start!
REISkip is the leading provider of skip tracing services. We can help you find motivated sellers and get your wholesale business off the ground.
Click here to learn more about REISkip and how we can help you succeed in wholesale real estate!
Happy wholesaling!