Yes, it is possible to invest in wholesale real estate with no money. The question is how? Let’s take it bit by bit, and later we’ll look at the process involved.
Our first stop is understanding real estate wholesaling. Wholesale is an aspect of real estate that basically involves finding a residential property for sale, drawing a contract with the seller, then looking for a buyer, and assign the contract to the buyer. Let’s break it down.
You will have to look for a home– usually, the type with a defect or that needs repairs — approach the owners and negotiate a selling price. Next, you will also run around to get a buyer( usually people that resell), you negotiate a buying price — with your profit included, and make the sale.
You may be asking why would anyone purchase a distressed building from you. Well, properties with defects sell at a reduced market value than regular types. Given this, owners are ready to sell low knowing the repair is costly. When a buyer purchases the distressed property from you, such one will spend well to repair the property and bring it to standard, then sell at the appropriate market value; a win-win for everyone involved in the deal.
Key Boxes To Tick
Before moving on to the key steps in real estate wholesaling, here a few things to keep in mind.
1. Knowledge of Real Estate
To make a success of wholesaling, you need to have a good knowledge of the local housing market and that of the real estate market. There are values, deals, and another marketing strategy to learn.
A wholesaler must be able to source for buyers and sellers since listings do not contain undervalued and defective home.
Do you need a license to function as a real estate wholesaler? The simple answer is no. However, legal regulations differ in some regions. In some places, the need to inform the seller and the buyer of your position as a wholesaler is necessary. Now, let’s look at the process involved in wholesaling; here 5 smart steps:
3. Search Properties Off Listings
The goal of wholesale is to get a home below market value, that’s the only way to make a profit and avoid the need to register as a realtor. Usually, you have to search for homes that not up to standard. This is because sub-standard properties are not prized the same as the types in good condition.
To find such properties, you need to search anywhere but property listings. Listings are handled by realtors who sell properties in excellent condition at a very competitive price. Some key things to search for in wholesale suitable properties are sources that contain the information of homeowners. Information like email address, phone numbers, and necessary property information.
4. Negotiating With Seller
Negotiating with the home seller is the next thing after finding a suitable property. Reach out to the seller to agree on a good price that will benefit you. This is a crucial part of real estate wholesaling. Here is why you have to brush up on your negotiating skill alongside persuasion. The price to be agreed on needs to be a lot less competitive and below market value such that you can make it appealing to a buyer. So endeavor to sign a contract at a cheap price.
To always get a good deal, a distressed property is best. Owners of these properties are usually eager to sell off their defective properties. So harness this opportunity to sign a good contract.
5. Sign a Contract With The Seller
This step is crucial. After an agreement, sign a contract with the seller. The process of signing a contract doesn’t require making a purchase. You need not look for money to purchase the property or sign any legal documents as an actual buyer will need to do.
6. Marketing The Property
The marketing skills mentioned earlier comes in handy here. Within the time limit agreed for payment of the property, a wholesaler needs to search for a buyer quickly.
A good way to search is getting a list of buyers that includes many types of potential buyers. These buyers are usually active property buyers that are readily purchasing after spotting a good deal.
Real estate investors are also suitable to be added to your list of buyers. Investors are always on the lookout for great deals. Given this, it’s important to grow your network of investors and buyers using as many means as possible. There are real estate platforms that give access to investors or individuals who have made purchases in the past.
7. Negotiating with the Buyer
The next step is negotiating with the buyer. Consider the market value of homes in comparison with the present property. Of course, it’s expected that the home you are about to sell to an investor should be cheaper than the types on listings. Regardless, always endeavor to add your profit without making the property too high. So ensure that there is a difference between the sale price and selling price(this is your profit), but it must be moderate.
8. Transfer of Contract
The last stage is the transfer of a contract to the property buyer after the sale is complete. This will also include the transfer of ownership from the seller to the buyer, and of course, you get your profit as the payment is made.
How Much Profit Can YOU Make?
The issue of profitability in real estate wholesaling is no longer a debate, it’s a matter of how much. Ideally, as a wholesaler, you can make as much as $5000 to $10,000. Experienced real estate wholesalers can make up to $15,000 to $20,000 by handling two to three deals simultaneously.
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Thank you for the positivity and the support!
Thank you for sharing
Yesssss definitely 👍 I love you chile❤ you are the truth you bring facts and receipts 💯 you keep it real… you talking about growth and knowledge girl Yesssss love it!! Im all in when can I start??
I applaud you as a strong black woman who didn’t allow her circumstances to define you. I have always been interested in wholesale real estate. I got into the real estate market early in life as a landlord through nuisance abatement properties, but my life took a different direction and I focused on my family and finishing my education. Fast forward 20 years later. I want to come back to real estate but do it differently. I want to hear more about wholesale buying and how to leverage my profit. Thank you for offering this opportunity and blessings in your business.
Thank you for the support sister, you can get started!
You said in certain regions you can do Wholesaling without license.
I have not checked in my location yet, reason being is because I would like to have my license first. Because of covid-19 the exams are on hold until further notice. But every time I read your information it makes me want to start right now, you’re so motivating. Thank you!
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