The main difference between flipping and real estate wholesaling is you don’t have to do renovations in wholesaling and you should resale the house in a short time. The role of the real estate wholesaler is finding the motivated sellers and to make a contract with the seller. Then the wholesaler needs to market the home to the potential buyers and assign contract with the buyer. The difference between the price mentioned in the contract with the seller and the amount paid by the buyer for the house is the profit for the wholesaler.
You don’t have to do any invest to become a wholesaler. The business is open to any type of people with the basic understanding of wholesaling. You can also earn good profit margin in wholesaling the real estate property than the traditional wholesaling business. Here are the steps involved in wholesaling the property.
The first step you have to do is find the right property for wholesaling. It is simple to find a property on an online website. You can also walk around the streets to find an abandoned home or marketing to figure out the motivated sellers. You can ensure the house is vacant by verifying overgrown grass in the garden, broken window, piled up old email box etc. You can ask the contact details of a property owner in the neighborhood houses and speak to the seller and check whether the seller is interested in selling the property.
When selecting your buyer, you must be very careful. You need to maintain a list of buyers who show interest to buy the property and always active in the real estate market. You sell the property to the buyer and get your wholesaler commission.
The next thing you have to do is control the property. As a wholesaler, you can have two options of control the home. The first type of control is assignment contract where you must include an assignment clause in the contract. Assignment clause refers to assigning your purchase rights to another person possibly the buyer of the house. You need to find a buyer to sell your rights at a decent profit. Once the buyer accepted the deal, you don’t have any connection in the deal anymore.
The next type of control is you can buy the property from the seller though financing options such as borrowing money from the lenders. You will not hold the property for several days for renovation or any other reason you must remember to fix the resale value including the interest amount to create profit.
You must have thorough knowledge in each and every step of the wholesaling process. You must put all your efforts and work with full dedication to achieve success. Once you get the buyer’s list who wants the property then you can easily work to fix one among them. You must also need a good negotiation skill. When negotiating with the seller, you must fix the price deep enough to get the maximum profit out of the deal. In wholesaling, you don’t want to spend any expenses from your pocket and choosing the right deals assures you profit.