Wholesale real estate involves finding properties that are being sold below market value and then finding buyers who are willing to pay more for the property. Here are some actionable steps to get started with wholesale real estate:
1. Research the real estate market of your choice to identify properties that are being sold at a discounted price. You can identify either on market or off market properties. Off market properties require you to go directly to the seller to negotiate price and terms of sale while on market properties are listed online to the public through an online listing service. Real estate agents are the only ones who list the properties through this service so you will have to work with the realtor to get the property under contract.
2. Evaluate the potential profit margin for each property, taking into account the purchase price, the estimated repair costs, and the expected sale price to an end buyer which is typically an investor looking for deeply discounted properties to either fix and flip or buy and hold as a rental property.
3. Negotiate a purchase price with the seller that allows for a profit margin when the property is sold to the end buyer (investor). This can be done directly with the seller or through a real estate agent depending on the route you are taking to acquire the property.
4. Find potential buyers for the property, either through your own network of investors or by marketing the property to other wholesalers who have buyers ready to purchase you’re the property that you have under contract.
5. Negotiate a sale price with the buyer that allows for a profit margin, while still being attractive to the buyer. This profit margin is called an assignment fee.
6. Close the transaction and transfer ownership of the property to the end buyer.
It’s important to note that wholesale real estate does not require you to purchase the property, you are simply getting control of a property by having a contract to purchase the property with the seller and then locating a buyer, while still under contract, to assign/sell the property to. Of course, there are specifics to the business that we have not discussed here but if you are interested in learning how to make 5 figures a month wholesaling real estate click here and join dozens of students who have taken action and closed 5 figure deals within 30 days.