Wholesale Quick Money: Real Estate Investing Strategies
Selling quick money wholesale is quickly becoming a popular real estate investment strategy. In essence, wholesale involves locating properties below market value and quickly reselling them for a profit.
Quick bucks wholesale is a relatively easy way to get started as a real estate investor. Anyone over the age of 18 can participate in the wholesale of real estate. All it takes is educating yourself on the process, developing a marketing strategy, and building a network of prospects.
There are four basic steps involved with wholesale real estate:
- Locate owners motivated to sell their properties
- Negotiate the purchase price
- Placing the property under contract
- Resell the contract to a rehabber or real estate investor
Wholesale real estate is similar to buying and selling houses. When investors buy distressed properties to remodel, they typically buy the property significantly below market value and spend money on repairs or renovations.
Repair costs are often over budget and take longer than anticipated. Every missed deadline and every additional expense costs the investor money. With the current housing and loan crisis, investors find themselves sitting on properties they can’t sell.
Selling wholesale eliminates many of the headaches associated with moving house. There’s no need to spend money on repairs or wait to find a qualified buyer. Instead, you become a real estate matchmaker, locating sellers who have what buyers want.
For sale by owner real estate is a perfect match for wholesale real estate opportunities. Many homeowners participate in FSBOs to avoid expensive real estate agent fees and commissions. Others put their houses up for sale to avoid foreclosure. Some FSBO homes are second homes that sellers must liquidate quickly. In other words, there are numerous properties to choose from.
The icing on the cake is when homeowners offer seller transfer financing. In this type of real estate transactions, the Sellers carry all or part of the financing. When it comes to seller deed financing, the property can be sold to a rehabber or investor without actually owning the real estate.
Homeowners facing foreclosure can benefit from participating in wholesale. Let’s say your home has an after-repair value of $190,000. You currently owe $120,000 on your mortgage note and are $3,500 behind on your payments. You need $10,000 for moving expenses.
You sell your home to a real estate wholesaler for $135,000. This pays off your mortgage deficiency, the balance on the mortgage note, and provides you with funds to relocate. Even though you have to move out of your home, you have saved up your credit and have money in your pocket to start over.
The real estate wholesaler now owns a home with $55,000 in equity. However, the home requires $10,000 in repairs to achieve the full purchase price of $190,000. Instead of spending money on repairs, the wholesaler finds a rehabber.
If the wholesaler sells the property to a rehabber for $165,000, he makes a profit of $30,000 with no out-of-pocket costs. The rehabber owns a property with $15,000 of instant equity. It’s a win-win-win situation.
There are numerous resources available online that discuss wholesale strategies. Although the real estate market is in a recession, there is a great need for wholesale. By learning the ropes, you can create a strong real estate investing business that offers much-needed relief to struggling homeowners.
