Wholesaling vs. Landlording & Rehabbing Real Estate

There are many ways to invest in real estate, the most common method being buying a property, renovating it, and then reselling it or renting it out. However, wholesaling real estate offers many advantages over the traditional real estate investment model.

As a real estate wholesaler, you can sell your interest in a property without ever owning the property. This method offers less risk, but still provides successful wholesalers with insane profit potential. In order to accomplish this level of success, real estate wholesalers specialize in finding below market deals for rehabbers, landlords and developers.

The sellers of these properties are usually people who are under financial stress due to a bad tenants, divorce, or foreclosure. This stress causes an urgent need to sell the property quickly, making the seller more inclined to agree to your price and terms at a deeply discounted price. Upon finding and putting a contract on the property, real estate wholesalers sell their interest in the property to cash investors for a profit. Although every market is different, it is not uncommon for real estate wholesalers to profit $300 to $100,000+ for each successful transaction.

Here the top three reasons why wholesaling houses just might be the best way to get your real estate investing career up and running:

No-Risk Investing

Wholesaling real estate entails very little to no risk, making it a great place for new investors to began. The only common risk associated with wholesaling real estate is if your cash buyer suddenly backs out from purchasing the property, which is unlikely to happen if you qualify your buyers carefully in advance. If the deal goes bad, the only money at risk is your earnest money deposit, which is often less than $1000. And if structured correctly you can put yourself in a position to never having to put up a deposit.

Low Start-up Costs

Since real estate wholesalers don’t actually purchase property outright, start-up costs are extremely low. Again, the only money needed is the earnest money deposit required to make your contractual agreement with the motivated seller legally binding in some states, and an optional marketing budget to generate motivated seller leads. The deposit will usually range from $1 to $1000. It may sound unbelievable, but it’s true motivated sellers will not bother to demand a large deposit because their primary concern is to sell their property as quickly as possible.

No Need For Good Credit

A real estate wholesaling business is a great way to become financially free in a short period of time. The great thing about this profession is that no one is going to question you about your credit score, since you don’t need to apply for financing. Remember that with real estate wholesaling, you are not going to be the end-user of the property—therefore you have no need to finance anything. As a wholesaler, you are simply the middleman between the motivated seller and the Cash buyer. If you want to start a business with little risk and low start-up costs, real estate wholesaling may just be the opportunity that will allow you to live the life of your dreams.

I”ll See you at the closing table,

Marcel Umphery the “R.E.I. Successmaker”