Wholesaling Real Estate - Full Time?

Question

Hello, I'm starting in the Real Estate business and read a post that people who are wholesaling aren't able to do it full time because there isn't enough deals. I don't find this to be true because I spend over 10+ hours a day within the last 2 months and about to close on 4 deals. It is very hard work, but I'm hoping it would pay and would like to do this full time. Is anyone wholesaling full time and making good money? Or is it better to start rehabbing and landlording? Thank you!

Brian P. · Answer

Greg Yes, I could make a living just wholesaling but why would anyone with the knowledge to be a good wholesaler want to limit their investing to just that..it is just natural to expand into other extensions when the opportunity arises. When I find a property to wholesale I just don't limit my exit to selling to a rehabber. My buyers list contains those that want to buy a fixer to move into as their home, there are those who own a rental property in the area and want to add to their holdings at a semi-retail price, even retail buyers, etc.

Rich Weese · Answer

This thread seems to have 2 different tributaries. One is wholesale, where you buy at a steal, and quickly sell at a nominal profit to some one else that does the work and fixes it yp. He is the rehabber in my book. Just the fact that the wholesaler only makes a small profit(because he has a small investment or NO investment in the property). Great return for not much money. The rehabber takes the risk, puts money and time and sweat into the property and stands to make a nice profit IF all goes well. In 2007-2008, I had a full staff put together doing foreclosures. I had a goal to make one million dollars in one year and then write another book of the day to day progress. I was close to on schedule when the lenders decided 4 loans max. I lost 7 of 8 deals that fell apart. I was short of my goal , but as I've posted before, i would've hit 750 for the 12 month period. It was real work, with 2 researchers, realtor, full handyman staff, and mgmt company. That was TX, where the auctions take place one time a month and you had to be ready. So, yes a rehabber can make big money, but it is hard work. I don't think a wholesaler can do as well,imo. Rich

James Hiddle · Answer

Those who have success with rehabs did you guys have partners that fronted the money and you did the work(hire contractors,etc)and split the profits?

J Scott · Answer

About half of my rehabs I fund myself (just pay cash for purchase and rehab costs). The other half I finance through a collateralized "line of credit" I have at a local bank. The LOC is specifically used to finance short-term (12 month) low-interest loans specifically geared towards purchasing, rehabbing, and reselling properties. Generally, I'll pay cash for anything I plan to hold less than 3 months, and then use financing for anything I plan to hold longer than that. The funny thing is, despite have a lot of cash in the bank and strong credit, I can't get long-term financing because currently my only income is from my real estate business, which -- despite being successful -- has only been around for a year. Until I have 2 years of verifiable income from the business, I can't qualify for any conventional loans. So, I use credit partners for any properties that I want to hold long-term.

J Scott · Answer

Charles - Listen to Will... Rehabbing takes good analytical skills, discipline and good decision-making, but it isn't rocket-science, and can be very profitable, even (and especially) in this market...

Will Barnard · Answer

Then you don't know Ryan Weber here on BP either. I don't disagree that is true but would add that if they new what they were doing and learned the proper ways of doing things they would not lose their shirts but be very profitable. I can make so much more with a rehab than I could on a wholesale deal. I also understand each persons wants and needs so the fact that you have no patience for it and are at a point in your life/career that it is not a fit for YOU is completely understandable. I think wholesaling is a great stratgey, particularly for those starting out, unfortunately, those strating out have a tough time at it because what they think is a good deal is not necessarily so, therefore, we get right back to the key to either of the two strategies mentioned (and that of any other investment strategy), KNOWLEDGE & Know-How!

Michael Rossi · Answer

Greg, If you're wanting to buy and sell, then rehabbing and retailing would certainly be more profitable than wholesaling. In other words, you would buy a property at a big discount; rehab it as necessary; and then sell it at retail to a homeowner or other buyer. Mike

Mark N.A · Answer

Greg, if it's working in your neck of the woods, great! But where I'm at there's so much supply that wannabe wholesalers are ending up as negative cash-flowing landlords.

Greg P. · Answer

Ok, could you tell me what is more profitable and worth while in this market?

J Scott · Answer

Agreed with everyone here, though I do know of one person doing it successfully full-time. She's here on the forums (I believe) under the name "TampaSteph".