Getting Started with Wholesaling Real Estate
Wholesaling real estate is a great way to get involved in the property market without truly owning a home. When a wholesaler buys a property, he or she puts the property under a contract, which is then sold to another investor at a higher price. The wholesaler pockets the difference. Wholesale deals are attractive to investors who know how to find distressed homes at deep discounts and then pass those savings on to other investors. As a middleman, the wholesaler can carve out a lucrative niche doing just that. Here’s how:
- Sell your services intelligently. There are a variety of strategies wholesalers use to find properties. Some pound the pavement in down-and-out neighborhoods looking to pitch their services to homeowners facing foreclosure. Others advertise in local publications and subscribe to online wholesaler databases. Decide which strategies work best for you, and pursue them aggressively. You may have to invest in advertising to succeed.
- Build relationships. Finding cheap properties is one important part of wholesaling real estate. Building the relationships that lead to sales is another. Develop a contact list of real estate investors and include those who specialize in buying wholesale homes (sometimes called “rehabbers”). By developing relationships with these influential individuals, you’ll have an interested pool of buyers who are eager to look at property purchased wholesale.
- Know your seller. The person selling the home to you is a key part of the wholesale real estate investing process. Many of your prospects will be selling distressed homes, and they may already be in financial trouble. Find out as much about the seller as you can. By figuring out how desperate their situation is, you can price the home accordingly and pass on any deals to your investors.
Without the right foundation in place, wholesaling real estate can go south quickly. But once you know the right people and develop the right real estate investing marketing strategy, you’ll be one step closer to wholesale success.