Wholesaling houses is often marketed as a low-to-no cost way of getting into real estate investing and this can be true. A new, wholesaler, can certainly profit with a much lower initial cash outlay than a, real estate investor, who has to buy a property and rehab it.
In, wholesaling real estate, a real estate, wholesaler, contracts with a home seller, markets the home to his potential buyers, and assigns the contract to the buyer. The, wholesaler, makes a profit, which is the difference between the contracted price with the seller and the amount paid by the buyer.
What Exactly is Wholesaling?
Wholesaling houses is often marketed as a low-to-no cost way of getting into real estate investing. However, the successful, wholesaler, has to have a firm grasp of what makes for an attractive deal – once you understand this process of , wholesaling, it becomes much easier and can be broken down into a serious of repeatable steps.
My co-host today on this podcast is Trevor Evans.
Trevor is a Professional Speaker, Real Estate Investor, Retail Store Owner.
Speaker/Trainer for Rich Dad Education and Founder of Personal Awakening brand “Being Normal Sucks.” Trevor has also been married for 19 years and have 2 beautiful daughters ages 22 and 18.
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Wholesaling Houses Stats and Statistics
According to available data, a typical wholesaler can close between 5-10 deals per month, earning an average profit of $5,000 – $20,000 per transaction, with the profit margin usually ranging from 5-10% of the property value as their assignment fee; in high-end markets, some deals can reach profits exceeding $30,000 per transaction.
- Average profit per deal: $5,000 – $20,000
- Profit margin (assignment fee): 5-10% of the property value
- Deals per month (average): 5-10
- High-end market potential profit: Up to $40,000 per deal
- Market conditions: Profit potential varies significantly depending on the local real estate market and its competitiveness.
- Experience level: More experienced wholesalers tend to secure better deals and higher profit margins.
How to get started with wholesaling Real Estate
Investors ready to learn how to start, wholesaling houses, will be happy to know the process is not complicated. Here are a few simple steps to get started, real estate wholesaling:
- Research your local market before getting started.
- Find a realtor with off market discounted properties.
- Secure a financing source that works best for you. This is usually a Hard Money Lender.
- Begin searching for potential, wholesaling, properties by driving for dollars.
- Decide whether to sell the contract or assign the contract.
What is a step by step plan: Wholesaling Houses?
Step 1: Create a Database of buyers:
Contact local Rehabbers and Contractors and ask them what kind of properties they are looking for to rehab.
You can find them at your local Chamber of Commerce or your local REIA
Ask them these questions.
1. What kind of properties are they currently rehabbing?
2. Type of properties they like to work with Eg. Single family or multi family?
3. What are they certified to work on? Eg. Are they certified to work on burn down or water damaged properties?
Step 2: Put an AD on Craigslist
Ask the following questions when you get responses to your AD
1. Is the property listed with a Realtor?
2. Are you speaking with the owner of the property?
3. Is the property in, Foreclosure, probate, bank owned, or free and clear
4. Does the property need rehab? If so what is the estimated cost of repair.
Step 3: Put together your power team which includes your Title and Escrow Agent.
If you structure your deals properly, you could use one escrow deposit for 10 properties!
In our first episode you talk about process. You said that setting up a process prevents failure.
What is the process for the real estate Wholesaler?
Wholesaler Website: do you need one
My friends at Connected Investors wrote this article on Getting started with, real estate Wholesaling.
Wholesaling, is often touted as the easiest entry point into the world of, investing in real estate. And financially speaking the barriers to entry are generally a lot lower, especially when compared to fix and flipping or buy and hold investing. Many experienced, professional investors have door-knocked and bandit-signed their way up the REI ladder without having more than a cell phone, gas money, and the will to WIN. read more …
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Free eBook: Wholesale Plan of Action Cheat Sheet
This cheat sheet was created by Connected Investors and goes into further detail on the Wholesaling steps.
Additional Resources
