How To Wholesaling Houses in 6 Steps | Start Wholesaling Houses 2021 – Real Estate Way Pro
How To Wholesaling Houses in 6 Steps
Do you want to start generating more income from wholesaling houses? Then it’s time to give wholesaling a trial. Not sure of how to get started? This comprehensive guide covers everything you need to know about how to start wholesaling houses and how to get started investing in real estate with little to no money. At the end of this guide, you’ll have everything you need to ensure that your wholesale deals run smoothly.
What is Wholesaling Houses?
Typically, wholesaling houses has nothing to do with purchasing an actual home. Instead, wholesalers obtain the rights to purchase a home via a contract and later sell these rights to an end buyer. The idea is pretty straightforward. A real estate wholesaler finds lucrative deals on some properties, places these properties under a contract, then assigns or sells the contract right to eligible end buyers. Most times, these qualified end buyers are usually real estate investors.
Wholesaling houses is fast gaining traction in the real estate ecosystem. It has grown to become a common practice for several successful investors. This begs the question: how do wholesalers make money? Simply put, anytime a wholesaler assigns or sells their contract to the end buyer, they qualify for an assignment fee. Like the finder’s fee, this amount is usually a given percentage of the overall property value. It is the difference between the amount paid by the end buyer and the contracted price with the seller.
To succeed in real estate wholesaling, you must have a firm grasp of the range of factors that constitute a lucrative deal. Once you have a clear understanding of these, your journey to generating wholesale profit becomes smooth and without stress.
How to start wholesale houses for profit in less than two months: a 9-step guide
Several wholesalers today concentrate on local markets – limiting their buyers’ network and deal-finding efforts to their local area. However, we are witnessing a form of revolution in wholesaling houses as more and more wholesalers now leverage remote wholesaling. Using data-driven insights and relevant tech eliminates limitations such as geographical location on the range of markets a wholesaler can explore.
This section covers local wholesaling as well as viable approaches to wholesaling real estate out of state and wholesaling properties online. However, before that, let’s have an idea of the steps involved in wholesaling.
1. Create and maintain a steady deal flow
Look around, and you’ll see motivated sellers and distressed properties everywhere. Still, creating strategies for finding investment real estate should be your primary focus. It all comes down to deal flow. Without lucrative and profitable deals, success relative to wholesaling is not feasible. Wholesaling houses is a profitable venture that you can use its processes over and over.
If you want to maintain a steady deal flow, become a marketing machine that is always on the lookout for motivated sellers. You may achieve this with old-school approaches such as bandit signs, driving for dollars or typical real estate website. On the other hand, you can leverage the technology and data-driven insights via software to locate properties with high equity and their seller’s contact information.
2. Meet with motivated sellers
After finding potential sellers, the next step is directly contacting them to get the property under a contract. This action aims to gather enough information about the seller, property, and situation at hand. It is the preliminary step in the deal analysis – with the ultimate aim of getting an appointment to assess the property. Insights you gain from your initial contact with the seller will give you a clear indication of what the profit is likely to look like.
3. Visitation and assessment
Next is visiting the seller and evaluating the property’s actual value, checking out the possible repairs, neighborhood, and other factors that may influence its value to an end buyer. Generally, wholesalers use a series of mathematical formulas to determine the amount to offer on the property deals.
4. Offer and contract
Once the preliminary assessment is over, the wholesaler then offers an amount to the seller and makes them sign a sales contract for the property. Typically, the agreement includes an assignment clause which signifies that the wholesaler may assign the contract rights to the end buyer. We also call this flipping the contract in real estate.
5. Work on your end buyer's list
Once an assignable contract is intact, the wholesaler then offers the contract/property to potential investors for assignment. As a wholesaler, you can build and leverage your buyer’s list by taking advantage of the latest online software for real estate investors, which will launch you into the next level with a massive network of qualified and active buyers.
6. End buyer visits the property
Many investors would prefer to evaluate the property themselves. So, when wholesaling houses, create a time that works for both the end buyer and seller to visit the property for further inspection.
7. Contract assignment
The next step is to assign your interests in the contract to the end buyer, one exchange for a wholesale profit. As mentioned earlier, this profit is the difference between what you offered the investor and the owner.
8. Close the deal and collect wholesale profits (assignment fee)
When the investor purchases the investment property from the seller, then you can now collect your wholesale profits from the escrow attorney or title company.
9. Try it over and over
Evidently, the journey to generating wholesale profit is relatively easy, and it is one you can always travel over and over. Using the profits, you can always invest in other ventures, then retake this path for more income. Primarily, the first point, deal flow, is the key to the success of the whole process. As long as new investment leads keep coming, you might as well be on your path to becoming a real estate millionaire.
Where to Begin?
As with all things in life, to be successful at any craft specific knowledge and training is required. The good thing is there are many courses out there even for free that can help get you started. Be cautious that you are receiving good information that will work in actual practice. Also be prepared to make a few mistakes along the way. If you are looking for a fast-track way to get started and are serious about wholesaling houses it’s best to attend live training with the latest techniques and strategies.
Also, you may want to read this article about flipping houses without using your own money.
If you would like additional tips, techniques, and strategies on how to start wholesaling houses, finding deals and fast tracking your success, subscribe to my newsletter.
All the best going forward!
