Real estate wholesaling is a type of short-term business strategy that’s used by investors for the purpose of making large profits. Contrary to popular opinion, real estate wholesaling has absolutely nothing to do with retail wholesaling, which involves selling large quantities of goods to retailers for repackaging and reselling to consumers at higher prices. Because the retailer buys in bulk from the wholesaler, the wholesaler is able to charge them a much lower price. Real estate wholesaling, however, doesn’t involve selling multiple properties at discounted prices. Instead, it’s a more unique strategy where a real estate wholesaler executes a contract on a home (often one that’s distressed) with a seller, then proceeds by shopping that particular home around to some potential buyers, and then assigning the contract to one of those buyers.
If you’re one of the many people who want to get into the real estate business but don’t have the funds, you should consider wholesaling. A wholesaler doesn’t have to take any courses, pass any exams, or obtain a real estate license. However, wholesalers still need to have knowledge of the real estate market, especially their local market, be able to assess properties to determine estimate repair costs and develop good comp reports to establish a reliable after repair value (ARV) for the subject property. If you possess this skillset along with having patience and great people skills, this may be a good fit for you.
You don’t even have to make a cash offer to get a quick closing. You can advertise “We buy houses in baltimore” and even become an advocate for residential redevelopment like F&H Property Solutions.
The Benefits of Wholesaling Real Estate
The major benefits include:
- A valuable experience
- Bigger paychecks
- Easy to learn
- Fast Entry
- Great for beginners
- High demand
- No credit or cash needed
No Money Required
There are several ways to make money in real estate on the side without having to save up all that money and deal with the purchase process. Using the legal strategy of wholesaling is one of the main ways you can purchase properties without ever putting down a deposit. Wholesaling real estate simply involves selling the homes to an interested party before the contracts with the original owners close. Wholesalers and sellers do not exchange money until the wholesaler finds a buyer. This makes it a win for you, as a wholesaler.