People have been spending more time in their homes over the last year and are faced with updates they’ve been putting off. Some have taken the time and resources to complete those updates and some have just been trying to survive during these hard times. There are homeowners out there that feel stuck with their properties with no good way out. Enter a possible solution; a Real Estate Wholesaler that can seek out these homeowners to give an alternative to the typical home sale and help sell their home without the hassle of making needed repairs.
In this post we’ll define Wholesale Real Estate Investing, show a few examples of how it’s used in business today, and provide 5 tips for getting started investing in Wholesale Real Estate Investing.
What Is Wholesale Real Estate Investing?
A Real Estate Wholesaler finds a motivated home seller, typically in a distressed home, and contracts to buy the home at a specific discounted price as-is. The Real Estate Wholesaler will then turn around and find an Investor to buy the home, typically around 5-10% higher than their contract to the seller.
When you enter into Wholesale Real Estate Investing there’s no need to have a cash deposit, down payment or other financial resources. What you will need is time, an understanding of the process, and due diligence to create a transaction that will satisfy a seller, create an opportunity for an investor and most importantly put earnings in your pocket.
To find potential sellers of a distressed home, a Real Estate Wholesaler can use PropertyKey to search for properties that may have delinquent taxes, code violations, or those that are bank-owned and contact the owners directly to see if they are interested in selling their home. Some Real Estate Wholesalers will send direct mailers to a particular neighborhood or area, which is also something that PropertyKey will let you customize.
Once a seller is found the Real Estate Wholesaler will draw up a contract determining the terms of the sale. This is where researching the property, its history, and having attorney assistance on the contract would help mitigate risk for all parties involved.
Next, an investment buyer has to find value in the potential opportunity and purchase price of the home. Creating and having a network of Home Investors ready to make a purchase allows this step to be quicker and smoother. Once you have built trusting relationships with other Investors, your job as a Real Estate Wholesaler just got easier.
Why is Wholesale Real Estate Investing Important?
Wholesale Real Estate Investing makes it easy for a home-stressed seller to move out and have a new beginning. The seller no longer will have to feel responsible for any repairs or have the possibility of foreclosure if they are not able to afford the mortgage. For people that have just inherited the home and would rather sell it quickly than worry about the cost is another situation where a Real Estate Wholesaler can help alleviate stress.
There are sudden life events that come up where owning a home is not feasible anymore. Whatever the case may be, these are perfect opportunities for a Wholesaler to step in and help out.
5 Tips and Reminders for Wholesale Real Estate Investing
- Research the property beyond what you may physically see. Utilize PropertyKey to find out the quality of the immediate neighborhood. Use it to find code violations, building permits, and rental licenses in the area.
- Check the state and county laws on wholesaling real estate.
- Great communication is a key part of a smooth transaction. Be transparent and let the seller know what steps you will take as a Wholesaler to get their property sold.
- Have a sound real estate wholesale contract with the seller. It is a best practice to have an attorney review the documents and contracts, making sure it’s laid out specific to the transaction at hand.
- Easily turn a quick profit and make a deal without a credit check. If you are willing to put in the time, PropertyKey can help you find distressed homes and their owners.
Wholesale Real Estate Investing may be easy to “get into” but isn’t guaranteed. Having an established network will make the process much smoother and easier. If you don’t have a network, you can search Facebook, Linkedin, and Google to find Real Estate Investor groups in your area.
Here at PropertyKey, we provide tools to help with your search and research process. We provide accurate real estate data and maps to easily show you insights without leaving your desk, sending an email, or picking up your phone. Take a no-obligation ‘Test Drive’ of our product and see how you can easily search complete property data!!