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Wholesale Properties

What is Wholesale Real Estate?

Wholesale Real Estate is the process of looking for a good real estate deal in order to sell it to an investor who is interested in it.

In this process, you do the searching and the leg work to find a good real estate deal, get such a deal on contract with the seller, and then sell the contract to another party who agrees with the terms identified by the seller.

In wholesaling a property, you are not actually the person who is selling the property. You are acting as the middle-person or third-party who is selling to them your position in the contract.

Therefore, your intent is not to make money out of the property itself but rather on the contract because you would be collecting a fee from the interested investor.

wholesale deals

Advantages of Wholesaling Properties

You can work with very little money with nothing to lose

In most cases, you don’t need to shed off a lot of bucks to start this venture. You can even actually negotiate with the seller in order to come up with a great deal.

As long as you have the right property, there is nothing much you could lose, and perhaps, you might have a lot more to gain.

The best properties for these deals are usually distressed homes, abandoned properties that need major repair, foreclosed properties, and those that have been in the market for a very long time. 

There is no need for you to secure financing for the deal

Since you are not actually trying to close the property in this process, but rather selling the contract to an investor or another buyer, there is absolutely no need to apply for a loan.

There is also no need for equity which means that you are not required to secure money for a down payment

You are not responsible for any repairs and maintenance

Technically, you are not the owner of the property; and you don’t have to play the role of the landlord either. You are just an owner of a great deal by contract. Thus, you do not have to spend your time and money on house repairs and regular upkeep.

If you want to mitigate the risks in the deal and find a way out should problems arise, you may opt for an escape clause. This is a contract that provides exit opportunities for such circumstances. But don’t overdo it and use as few escape clauses as you can manage.