By Michael Del Prete | AZREIA
Wholesaling real estate can be an excellent strategy for investors who are looking to quickly flip properties for a profit. In a typical real estate wholesale deal, the investor finds a property that is undervalued and contracts to purchase it from the seller. The investor then finds a buyer who is willing to pay a higher price for the property and assigns the contract to the buyer, keeping the difference between the two prices as their profit. Through AZREIA’s polling results over the last six months, our members average an assignment fee of $12,000.
There are several advantages to using the wholesale real estate strategy. One of the biggest advantages is that it allows the investor to make a profit without owning the property. This means that the investor does not have to worry about financing the property, making repairs, or managing tenants. Additionally, because the investor is not taking on the full risk of owning the property, they can also make a profit even if the market is not favorable for flipping properties.
Other Advantages of Wholesaling:
- The ability to quickly enter the real estate market. Because the investor is not purchasing the property outright, they can often close and get paid on a deal in a matter of days or weeks, rather than months or years to profit.
- By wholesaling multiple properties, investors can generate a steady stream of income without having to actively manage each property.
- Growing a network. Wholesaling can be a great way for investors to build relationships with other real estate professionals, such as agents, contractors, and other investors. These relationships can provide valuable opportunities for future deals and can help to grow an investor’s business.
- Boosts your company’s revenue. If your main strategy is a fix and flip or buy and hold you most likely are evaluating multiple deals. In some cases, if a property doesn’t fit your criteria, you can still control the deal and assign it for a profit. Doing this a few times a year will impact your bottom line.
- Location independent. You can literally wholesale real estate deals from anywhere in the world. In most situations, all you need is a laptop and phone to get a wholesale deal completed.
Overall, wholesaling presents an excellent opportunity for all investors new and seasoned as it can require little to no capital and is a great way to learn the ropes of the real estate industry. Some individuals like wholesaling so much that they make it their career. Either way, if you are driven, disciplined, and organized, there is no limit to how much money you can make in your wholesaling business.