subject: The Basics Of Wholesaling Real Estate [print this page] If you want to break into the real estate investment business without having to invest large sums of money, wholesaling real estate could be the perfect opportunity for you. Its the safest, fastest and easiest ways to getting your feet wet in this profitable industry that has helped many people achieve wealth and freedom.
In simple terms, wholesaling real estate is when you purchase a property well below market value and then quickly re-sell it to an investor buyer at a reasonably marked-up price. Here is a quick rundown of how a successful real estate wholesaler usually operates:
1) Find a motivated seller with a property that fits your investor buyers buying criteria
The magic word here is motivated. You will need a motivated seller in order to obtain the best deal. A motivated seller is someone who needs to sell a property, and is more concerned with a quick sell as opposed to receiving top dollar for their property. Often times a motivated seller could be someone who is going through a divorce, someone who needs to relocate, or home-owners who are facing foreclosure or behind on bills. You should also take a good look at the property and make sure that youre able to purchase the property for 40-60 percent or less of its after repaired value (ARV).
2) Make an offer and put the property under contract
Although every market is different, there is a popular formula that successful real estate wholesalers use in order to determine the Maximum Allowable Offer (MAO) to make on a property. This maximum allowable offer is determined by discounting the after repaired value (ARV) of a house up to 65% and then subtracting the costs of any repairs that need to be made to the property. Many sellers will refuse your offer, but if you focus on dealing with motivated sellers that need to sell their house, you will begin to see your offers approved in due time.
3) Locate a cash buyer
The easiest way to find cash buyers for your wholesale deals is by simply driving the nearby neighborhoods and locating any home that is currently being renovated. Often, you will find that the owners of these homes are real estate investors that are looking to acquire more properties in the area. You can also market your wholesale deal by placing classified ads online or through a variety of other marketing strategies such as direct mail and bandit signs.
4) Closing the deal
Once you have a profitable deal under contract and you have found an interested cash buyer, you simply need to close the deal in order to receive your check. The beauty of wholesaling real estate is that you dont need cash or credit, and you never have to worry about renovating a property or deal with tenants. You simply find a good deal and a serious cash buyer and you have the winning combination for quick cash.
Wholesaling real estate may seem intimidating at first, but it doesn't take long before it becomes very enjoyable and even addictive. The amazing thing about wholesaling real estate is that you can do it anywherebe it in your own hometown or in another city. Rest assured that you can wholesale anywhere in the country! What matters is that, whatever location you choose, you must focus on two things: finding motivated sellers who are willing to sell their property at a deep discount and serious investor buyers who will quickly purchase the property from you. Any place that has these two ingredients is the perfect place for wholesaling houses!
For more information on how to get your wholesaling real estate business started and to learn how to avoid the many pitfalls most beginning real estate investors make visit http://www.flop2flipwholesaling.com and http://www.DMVREIUnited.com for free videos and eCourses that will help you get started the right way.
