Real Estate Wholesaling Reaches A Tipping Point
According to major news outlets, real estate wholesaling appears to have passed its tipping point. In other words, it has become one of the most popular real estate investing strategies. While anything but new, wholesaling real estate has finally caught on with the masses, or so it would appear. So why is wholesaling finally getting its moment in the spotlight? What specific advantages does it offer all parties in the mix? What will the growing attention and appeal of wholesaling mean for those investors that are already using this strategy to bring in money? A recent report from Best Transaction Funding highlighted the growing number of major news outlets proclaiming the advantages of wholesaling. This includes the Huffington Post and Fox News. The coverage may be, in part, due to the continued presence of undervalued properties that need to be flipped. With this in mind, what is so great about wholesaling? Wholesaling for Investors Recently, the Huffington Post highlighted how wholesaling may be the better real estate investment strategy for those not wanting to deal with rehabbing, those who have little cash, and simply for the ease of it. The publication points out that wholesaling, in general, has a proven track record. Yet, it notes that wholesaling real estate has even more economic advantages than many are familiar with. According to the report, in order to get started you’ll need to get educated on the topic, find a transactional lender to help fund your deals, start building a buyers’ list, and negotiate discounts. Still, that seems like a pretty good exchange for better profit margins than other types of wholesalers, and less work and risk than other real estate investors. Wholesaling for Sellers Wholesalers can offer property owners some significant advantages when it comes time to sell. They may not offer the most gross money, but when factoring in being able to sell immediately for cash, some may still find it more profitable. Wholesaling for Buyers The Wall Street Journal recently published a new piece on how many properties, that are not on the MLS, are being sought out by homebuyers. This may be the result of Realtor pocket listings, the fact that sellers haven’t put them on the market yet, or that they are only available through wholesalers. Either way, it clearly pays for those buying real estate to connect with local wholesalers to find the deals and properties they want. The Outcome for Real Estate So what does all the media attention mean? It could mean that wholesaling is finally becoming accepted in the mainstream, and being publicly legitimized. This is a huge milestone for those that have been teaching about wholesaling for a long time. Though, of course, many may wish that others weren’t turned on to their private cash cow. Greater awareness, and more credibility for wholesalers makes it easier for wholesalers to do business. With the right marketing, it could lead to potentially higher conversion rates, and deal volume. This is also a massive wake up call for Realtors to embrace working with wholesalers. If they do, it means the potential for more volume, and even doubling up transactions, as well as the higher margins that come from working with investors. While wholesaling may not be the real estate investing niche for “everyone” as the Huffington Post suggests, it still has broad appeal for those willing to put in the effort, learn their stuff, do it right, hustle, and add value. That could bring a substantial amount of new competition to the industry. This will benefit everyone as awareness increases, but it will demand being on top of your game if you plan to stay ahead of the crowd.