Can You Make Money Wholesaling Houses
Top Reasons to Start a Wholesaling Real Estate Business
A real estate wholesaling business buys off-market properties at a deep discount with the intention of selling or assigning the property to another real estate investor. This business can be rewarding and educational — making it a perfect fit for anyone interested in real estate investment who is also passionate about finding great deals.
We developed this guide to bring you the top five reasons why you should consider starting a real estate wholesaling business.
- Low Startup Costs
- Operate the Business From Your Home
- Provide a Service to Your Community
- Wholesaling Is Lucrative
- It's a Low-Risk Way to Start Investing in Real Estate
1. Low Startup Costs
Starting a real estate wholesaling business requires little initial investment. Unlike house flippers that buy the house outright, you operate as a liaison between homeowners and real estate investors — bringing them a fantastic deal on a property.
Unlike other real estate investment strategies that require capital, you do not need any money to wholesale a property. You act as a middle-man between the seller and real estate investor — not as a buyer. However, to mitigate liability during this process, be sure to include the following in your offer contract:
- Disclosure of your intention to transfer or assign the property to another investor
Additionally, real estate wholesalers typically don't have employees or an office lease, which saves you money right from the start. However, to find potential properties, you will at least need a mode of transportation, a phone, and some funds to dedicate to marketing.
2. Operate the Business From Your Home
You can wholesale real estate from the comfort of your living room, which means your wholesaling business can operate on your schedule and without the hassle of leasing an office space. Wholesaling can be parlayed into a full-time job or a lucrative side business — which means you can wholesale real estate even with a full-time job.
While you can be based out of your home, the biggest task of a real estate wholesaler is finding properties to buy wholesale, which means you might need to go out and be proactive in your search.
Ideally, you will look for potential properties once a week using at least one of the following methods:
- Driving for dollars
- Cold calling
- Door-to-door
- Skip tracing
You will also be responsible for evaluating the home's after repair value (ARV) and assigning offer contracts to your buyer. This business is all about communication and reliability — it is up to you to move these deals forward efficiently.
3. Provide a Service to Your Community
Real estate wholesaling can benefit a community in several ways. Your services provide an avenue for homeowners to make money off a burdensome property, neighbors to see improvements in this community, and investors with the opportunity to generate profit.
Homeowners
By offering a fair price for distressed or unwanted homes, you save the homeowner time and effort while putting money in their pocket. This is especially impactful when the seller is a family member of the owner or a person who couldn't continue to take care of the property. Either way, if the property has become a burden to the seller, your services provide them with a solution as well as fair compensation.
Neighbors
Additionally, if the property has a large amount of deferred maintenance, neighbors will most likely appreciate the potential for improvement. Your services expedite this process by passing ownership to a party that will repair and give it new life.
Investors
Not only are you providing investors with another avenue to make money, but you are also saving them the hassle of sourcing the properties themselves. Since a large portion of your time will be dedicated to finding the right properties to wholesale, your services allow real estate investors to save time and resources by bringing them properties directly.
4. Wholesaling Is Lucrative
On average, real estate wholesalers can expect to make between $5,000-$10,000 in commission per property. Once you have a property, a contract, and an interested buyer, this process can move quickly.
To maintain steady profits, you can keep multiple properties in your pipeline at various stages of the buying process. The amount of properties you can wholesale at one time depends on a few factors:
- Your knowledge level
- How much capital you have to invest in your business
- The amount of time you can dedicate to wholesaling
If you have the time and know-how to succeed in this business, real estate wholesaling can be a simple, quick, and lucrative business. Whether you plan to do it full time or as a profitable side business, real estate wholesaling can be a good fit for a variety of lifestyles.
5. It's a Low-Risk Way to Start Investing in Real Estate
Other real estate investments can be highly rewarding and also higher risk — especially if you are still learning. Wholesaling provides an avenue for anyone interested in investing in real estate to familiarize themselves with the process without taking on higher risk investments.
After you build a strong foundation of knowledge through your wholesaling experience, you can use the profit you've gained through commission to invest in bigger real estate purchases with confidence.
For example, you could use your property-hunting skills to find a great deal that you can flip easily without paying wholesaler commission to increase your profits tremendously or upgrade distressed properties to use as a rental for monthly income.
Recommended: For everything you need to know about buying and flipping real estate, read our full guide on how to start a house flipping business.
Conclusion
If you are looking to get involved in real estate investment, wholesaling is a terrific way to start. This business requires little initial investment and low risk but delivers fast, providing you with the skill and financing to expand your investments and provide a service to your community. If you're ready to get started, read our guide on how to start a real estate wholesaling business.
Related Articles
The Business Planning Guide
Business Insurance for Real Estate Companies
Choosing a Business Structure
Home Staging Business Idea
Form an LLC
How To Name Your Business
Real Estate Brokerage Business
Home Rental Business Idea
Frequently Asked Questions
How much does the average real estate wholesaler make?
As a real estate wholesaler, you can expect to make between $5,000-$10,000 per house. The number of houses you wholesale will depend on the time you are able to dedicate and the number of houses or investors in your pipeline.
Is wholesaling real estate easy?
Wholesaling real estate isn't easy, but it's simple. The process of wholesaling real estate can be simple as long as you have a steady stream of properties and investors as well as a solid foundation of knowledge. Most importantly, wholesaling requires dedication and effort.
Do you need to be an LLC to wholesale real estate?
Technically, you can wholesale houses without an LLC. However, it is strongly recommended that you do form an LLC prior to wholesaling real estate.
Have a Question? Leave a Comment!
Can You Make Money Wholesaling Houses
Source: https://howtostartanllc.com/real-estate-investing/five-reason-to-start-wholesaling#:~:text=4.-,Wholesaling%20Is%20Lucrative,this%20process%20can%20move%20quickly.
Posted by: murphynower1969.blogspot.com
0 Response to "Can You Make Money Wholesaling Houses"
Post a Comment