Real estate wholesaling is one of the best real estate investment strategies to make money in real estate. Keep reading to find out how to wholesale real estate for maximum profit.
Get educated on real estate wholesaling
The definition of real estate wholesaling is simple: You find a real estate property for a low price, assign it to a contract, and then find a buyer to purchase it for a higher price. The difference in price is what you get out of the deal as a profit. However, there is more to real estate wholesaling when you want to make money. In order for you to close a successful deal with maximum profit, you have to know all the tricks associated with it. Learn what it takes to get the best deals to wholesale and the many ways to make money through it.
Is real estate wholesaling right for you?
We know we are supposed to tell you how to wholesale real estate with the maximum profit. However, you should know that stopping a loss is the greatest gain ever! The reason we are saying that is that many people want to get into wholesaling not knowing that it takes more than just finding the property. They make vital mistakes that lead to major consequences. With this, we do not refer to money as wholesaling is a great way to start in real estate investing with little or no capital at all. What we are actually referring to is that, besides education, you will need strong negotiation skills. We can assure you that around 70% of the wholesaling deal depends on your negotiation skills.
You will also have to have patience. Sometimes, it takes a long time to find a buyer and close the deal. If you have enough patience and strong negotiation skills, it will be worth it in the end as wholesaling real estate might bring great rewards if done the right way. Therefore, decide whether wholesaling is for you, and then go ahead with the rest of the process of buying a real estate property.
Find the property you want to wholesale
Now comes the real deal. Finding the right property is a matter of having access to the right resources. There are so many resources out there where you can start looking for properties. You could always go the traditional way of looking in print media such as pamphlets and newspapers. You can find these at any local grocery store. Also, you can use the internet to look for properties for sale. There you can find wholesalers websites and other real estate wholesaling companies and groups. So, there are really plenty of resources when it comes to buying a real estate property for the purpose of wholesaling.
Make an offer to the seller
After you have found the right property for sale, contact the seller. Meet with him/her and try to convince him/her to sell at the lowest price possible. For this, you will have to take into consideration the property’s condition. After all, you will have to do proper calculations in order to leave a margin for profit. Only after you have convinced the seller, you can proceed with the contract. Most wholesalers prefer to prepare the contract themselves. So, make sure you know how it is done; otherwise, you will need to hire a real estate attorney.
Hire professionals
Remember, it is best to find a distressed property to wholesale it. Therefore, you will need to hire professionals such as appraisers and title companies. An appraiser will make sure that you are buying the property for the right price. As for the title company, it will ensure that the property has no major problems by running a check on it. You might think it will cost you money to hire these professionals; nonetheless, they will be handy in the long term and help you get the maximum profit out of a deal.
Estimate repair costs
A distressed property will cost some money to repair. Therefore, before you find a person to buy a property, you will have to bring in a contractor to estimate the repairs needed for the property. This is important, especially, when you find a buyer. He/she needs to know exactly how much money he/she will have to spend when buying a property. What you should keep in mind is that this deal is not about you profiting only but also the deal should leave a margin for the buyer to profit.
Look for a buyer
Now that you are done with appraising and estimating repairs and have made sure you are paying the right price, go ahead and find a buyer. However, you should learn how and where to find buyers as they are the determinant factor of the deal. Your buyer could be a real estate investor or even another real estate wholesaler. Go ahead and check real estate investors’ forums and groups. You can also check amongst your family or friends if they are looking to buy a property.
Negotiate the deal
This is the part that your deal depends on. After you have found the buyer, you will have to negotiate the deal with him/her. This step is very important as it determines how much money you make out of the deal. Be sure to mention the estimations you got from the appraiser as well as the contractor. When negotiating, however, do not forget to include your expenses in addition to some more money, which is your profit. Your goal is to close the deal with as much profit as you can make.
Close the deal
As you sign the contract with the seller, the closing date should be mentioned already. Therefore, you want to make sure to find a buyer before the closing date approaches.
When closing the deal, the ownership and the rights of the property will be transferred to the buyer. This means that you, as a real estate wholesaler, will get out of it. For more information, check out our blog, The Pros and Cons of Wholesaling Real Estate.
Finally
It is not all about how to wholesale real estate. Instead, it is about how to wholesale real estate with the maximum profit. The whole point of this business is to make money. Therefore, if you are wondering how to sell a real estate property, make sure to visit Mashvisor for guidance.