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Wholesaling is the Key to Success In Real Estate

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Brian CT Category: Wholesale
Current Grade: A
Total Views: 3966
Member Comments: 0
Posted on: 10/16/2008
Posted by: Brian CT
Article Points: 318
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I have touched base on wholesales before however I want you to understand how powerful this niche in real estate investing really is. Does the term “fast cash” catch your attention? Wholesaling may be one of the most profitable niches in real estate in terms of hours worked versus the size of your paycheck. The standard wholesale check that I earn ranges from three thousand dollars up to twenty thousand dollars. However, on average they are between five and ten thousand dollars. Here is what makes this business so lucrative. A typical wholesale deal takes less than a full day of work to complete. I take a walk through the house, meet with the homeowner, do some research at the city hall and on the internet, and call people on my buyer’s list to see if they want the house. I can do all this within a few hours. If I earn a wholesale assignment fee in the amount of ten thousand dollars and it took me four hours of actual work to complete the deal, I am being paid quite well. You don’t have to be a math whiz to realize I just got paid twenty five hundred dollars per hour. Now how many of these deals do you need to do each year to be a full time real estate investor?

Here is another reason why wholesaling is such a great business. You do not have to be a genius with a high degree of education. An amateur can do this with a little training. This business creates an opportunity for literally anybody to make a fortune in real estate.

If you are looking to get started in this business there are a couple key elements you have to understand:

1. Networking: In order to be successful, everyone has to know that you buy and sell houses. Don’t try to run your business under the radar. People must know you as the person who always has great deals for sale. You want them to come to you. You can start by attending your local real estate investment clubs. Every state has one. They typically meet once a month and the place is full of investors. Not a bad place to build a buyers list.

2. Research: You must have a firm grasp on real estate values and the average cost of repairs. This will come with experience, however you can get pretty good at it just by doing research on your local town’s property values. I am able to pinpoint exactly what an investor will pay me for a house. I do this by knowing how much money the repairs will cost them and how much they will be able to sell the house for once they complete the repairs. This is how I determine the size of my finder’s fee. If there is a large spread of equity I will be charging a larger fee.

Here is the best part. You can never be overwhelmed with deals because you are not buying houses and you are not rehabbing houses. You are flipping contracts. You have almost zero overhead costs to run your business.

 

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Current Grade: A
Category: Wholesale
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Vieving 1 - 8 out of 8 comments
Motivated@Persistent

Posted By: Motivated@Persistent on 01/16/2010

thanks for the info,"codo's "too your success.

Phillip Fields
 
Barry & Merlie

Posted By: Barry & Merlie on 08/14/2009

Our investment strategies go through cycles depending n the economy, etc.  We bought lots of condos in Hawaii in early 2000's and held for renters for years.  Today we are selling those high-equity condos and investing in high job growth areas such as Indianapolis.  Smart investors need to adjust: yesterday's strategy was buy & hold, but today's strategy is buy and sell with Seller-Fi, rent to own, or lease w/option.  Why? because so many are having problems with conforming loans and we as investors are here to help; no kidding - we are the folks who will pull the working class out of this recession.

 
csibley

Posted By: csibley on 07/23/2009

Wholesaling is a great way to build a short term income and get started in real estate.  Thanks for this article!

 
rayshir

Posted By: rayshir on 05/19/2009

how can a person obtain a buyers list in these times. and where do you even start to find

 
phillyjake

Posted By: phillyjake on 04/01/2009

Diversify your strategy as Brian said and you can create cash flow combined with long term wealth...Ryan How about doing a lease option - you can get some cash flow from the deposit plus be able to collect a higher rent since it will go towards the purchase price - not to mention when you write the agreement you can project the value 365 days out to give you an increase in value instantly....4 out of 5 don't exercise the option so every year or two you can continue to lease option the property    I like wholesaling but warning....build your team first - its much easier....good luck..

 
Jim5775

Posted By: Jim5775 on 02/15/2009

Ryan,

I love it. I have bought 3 buy and holds and I must tell you though in the back of my head I know they will pay off in say 10yrs. but I want the money Now!! and would really like to get into wholesaling houses. I think too this is a great way to get the working capital needed to buy more buy and hold type house for the long term wealth that everyone is looking for, I mean let's face it, even though wholesaling my pay huge checks eventually you need to go back to work to make another huge check or you will run out of money, but if you are using some of that quick cash to build a solid portfolio then that is absolutley the way to go. As I said I want to try and focus on wholesaling.

 
Brian CT
EducatorAmbassador
Posted By: Brian CT on 11/01/2008
Well that's only one piece of the puzzle. We buy and hold properties as well for the purpose of building long term wealth. It's definitely a smart strategy. The nice paychecks in between though are made from wholesales, short sales and rehabs.
 
Dawg House
Ambassador
Posted By: Dawg House on 10/31/2008
I wish investors would embrace actually owning and renting out real estate.  That's how the REAL wealth is built!