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Oct 24

Wholesaling Real Estate for Quick, Low-Risk Profits!

Wholesale your way to wealth.

Wholesale your way to wealth.

Wholesaling Real Estate for Quick, Low-Risk Profits! 

If you’re looking for an opportunity to build wealth using investment real estate, but you have no capital or credit, then wholesaling properties may be the perfect strategy for you. Getting started with wholesaling real estate is easy because when you wholesale houses you don’t need a real estate license and you don’t need a lot of money. All you need is the ambition to jump in with both feet, and the knowledge it takes to close the deals. The more ambitious you are, then the more likely you’ll succeed.

 What is Real Estate Wholesaling?

When you wholesale houses, what you’re doing is putting homes under contract and then assigning or selling that contract to another investor. You never actually own the property, but you have the right to buy the property by virtue of your contract, as well as the right to sell that contract because you’ve inserted the phrase “and/or assigns” after your name as the buyer.

Controlling real estate in this manner requires very little money. Usually, you offer a token security deposit of $10-$100 as consideration in exchange for the seller agreeing to an assignable contract. Homeowners willing to work with a wholesaler are usually sitting on a property that is distressed in some way. Either the property needs a lot of expensive repairs or the homeowner is behind in payments and facing foreclosure.

How to Get Started Wholesaling Real Estate

A wholesaler is building wealth by turning over contracts for distressed property as quickly as possible. The truth about real estate is that no matter what’s wrong with a property, an investor will buy it if the price is low enough. Your job as a wholesaler is to do two things well, 1) find distressed properties, and 2) build a network of investors ready and willing to purchase those properties on a moments notice.

Essentially, you’re a middleman between buyer and seller in your using your specialized knowledge about the market to bring the two of them together. Few sellers are savvy enough to sell their own property, especially if there any distressed situation. And no investor can possibly know about every distressed situation that arises in the marketplace. That’s why if you keep your ear to the ground you can make a lot of easy money searching for real estate wholesaling opportunities.

For example, if you find a distressed owner of a property worth $80,000 in salable condition in your able to put that home under contract on contingency for $40,000 you can turn to your network of real estate investors and sell your contract for $45,000 in just a matter of days.

Unlike “fix and flip” deals, you have very little risk in the transaction because you don’t actually own the property. You own the contract which is nothing more than the right, not the obligation, to buy the property. You’re not obligated to go through with the transaction under any circumstances because you always insert a contingency clause that allows you to back out of the deal if you’re unable to find an investor prior to the closing date for the property. Your total risk in the transaction is your security deposit.

It’s essential that you have a contingency clause in every contract to protect yourself. Contingency clauses can be any one or more of the following:

  1. Purchase is subject to business partner’s approval.
  2. Purchase is subject to a satisfactory well/septic tank test.
  3. Purchase is subject to a satisfactory roof inspection.

Because of the low risk and high return nature of wholesaling real estate, it’s a great way to build cash reserves until you can afford to move up to buy and hold strategies, which is where you build wealth through passive income.

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