distressed property for real estate wholesale

Wholesale Real Estate – What is it?

wholesaling real estateHave you ever thought about breaking into the Real Estate business? This is a perfect way to learn how to start a business. There is not much cost or risk in wholesaling Real Estate.

I have been wholesaling Real Estate in my spare time for the past year. It is a fantastic way to earn some extra income.

I will explain in detail what wholesaling Real Estate is and why it is so great.


What is – Wholesale Real Estate

Wholesaling Real Estate is selling property that you do not own. It is considered quick flips. It is not always easy but it can be done.

When you begin wholesaling real estate you want to look for properties that are distressed. Homes that have been vacant, vandalized, or the owners have entered into bankruptcy.


You want to find these homes because you are looking for properties that you can purchase at a discounted price. All of these types of homes have something in common, you can help the owner receive money from a distressed property.

What you do as a wholesaler is act as a middleman connecting two separate parties.

The Seller and the Buyer.

Your buyer is someone who rehabs home as a full-time business.

Wholesaling real estate is finding properties that are in distressed conditions and purchasing them at discount and then selling it to your buyer at a higher price.

You want to sell properties in “as is” condition.


How Wholesaling Real Estate Works

There is a backward process to getting started.

You first want to find a title company. Your title company is going to be local and they handle these transactions. You will begin calling up different title companies asking if they can assign a contract or do a simultaneous double closing.

Next, you will want to start finding end buyers for your properties. You can find buyers by posting fake ads on Craigslist or Backpages. Something that reads you have a home for sale at a discounted price. Tell them you have already sold it and will have something else soon. They will tell you to contact them on your next one. Investors love discounted properties.

Finally, you will begin marketing and find “as is” properties.

You can market online with your social media. You can run ads on Craigslist. You can pay small amounts for advertising in newspapers, church bulletins, or diners. All you are doing is starting your marketing campaign very cheaply.

One of the best things is using bandit signs. Those are cheap and you can post them all over town at busy intersections.

Make an Offer

When you start getting calls and find a seller, you will make an offer. Your offer will depend on the area, condition, and how much you want to make.

You need to determine the ARV of that home if it was in perfect condition. You can do this by looking at what has sold in the area with similar square footage, bedrooms, and baths.

Let’s say you determine the end value of the home is $200,000 after it is repaired.

But the home has $50,000 worth of repairs.

ARV – 50,000 = 150,000

Next, you will calculate for your investor to make money. A figure between .65 and .70

150,000 x .65 = 97,500

That is how much your investor is going to pay (97,500)

You need to make money. Depending on how well you can negotiate subtract from 97,500 how much you want to earn.

97,500 – 10,000 = 87,500

That is how much you will offer


It may seem low, but remember you are providing a valuable service to the seller and to the buyer. You need to use your negotiating skills to prove this. You can relieve the homeowner of a property that is just costing them money and they can make money from you!


Why Wholesale Real Estate

Wholesaling real estate is work that can be a lot of fun. You are out there on your own making deals happen. There is no better feeling than closing a deal you put together.

The costs of this business are very minimal
and there is no risk.

I will be wholesaling real estate for the rest of my life. When you can make two parties happy on a deal and make money off of that you will understand why this business is so great.

If you want to learn more about wholesale real estate, post down below in the comments and I will get back to you.

If you have questions or concerns please leave them below!

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