The Bottom Line Basics Of Real Estate Wholesaling For Beginners
Flipping houses (also known as wholesaling houses) is the quickest method to make cash in real estate investing. It is also the business model that needs little to no money invested.
You can get your check in as little as two to three weeks. The profits may not be as big as other real estate investing business models, but you can generate a healthy income just by wholesaling houses. You can make an average of $5,000 to $15,000 or more per deal, with very little effort and work. It is possible to do 2 to 3 wholesale deals part time each month.
Generally, you have to identify great deals at below market value and buyers with cash, usually other real estate investors.
I do not rehab anything when wholesaling houses; this is the work of the real estate investor that I flip the deal to.
To be successful as a real estate investor flipping houses, here are a few tips you must follow.
1) Buy at a Price Range Comfortable to You
Most rehab real estate deals fall in the middle price range. In my area, this is around $250,000 or lower. Some lenders demand you stay within a certain price range before they can lend their money. By going too low, you could end up buying in the wrong neighborhoods. Going too high can limit the number of buyers you have. It is necessary to have high speed for successful wholesale real estate investing.
2) Avoid Insecure Neighborhoods
Fairly priced neighborhoods are most popular with most real estate investors. Notwithstanding the fact that lower prices are always better, most real estate investors would rather buy where they can rent them out easily. It is therefore necessary to target good neighborhoods for successful wholesale real estate investing.
3) Estimate Your Repairs Fast and Accurately
Rehab cost estimate is a necessary part of flipping houses. Most need repairs, and you must take this into consideration when making your offer. When buying wholesale houses, I buy below 70% of fair market value minus rehab costs. The lower my offer, the more my potential profits when I flip to other real estate investors.
4) Make Educated Offers that Get Accepted and Leave a Profit
The most important part of real estate investing is making an offer. When flipping houses, you must make a profit and still leave a profit for the real estate investor buyer.
Obviously, as long as you know the estimated rehab costs and the after repair value after it is fixed up, you will be able to make an offer that both gets accepted and leaves enough cash on the table for both you and the wholesale real estate investor you flip the house to.
5) Identify Rehabbers with Cash, Mainly Other Real Estate Investors
Once you have a contract to buy, you must get a wholesale buyer with cash who will fix it and sell, or hold it. You must verify where the money is coming from before flipping your houses. Hard cash in the bank or line of credit is always preferable. This way, you avoid lending red tape and sell your houses fast.
Most importantly, they must produce a sizable nonrefundable earnest money before I can sign a contract.
6) Close Your Deals Quickly
As long as you have a cleared source of cash, you can close your deals in 2 to 3 weeks. Speed and volume will then be easy, making you more profits.
Terry
WHOLESALER
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