What is the Real Estate Wholesaling Strategy?
- Real Estate Wholesaling Strategy
The real estate wholesaling strategy is a way great way for beginning real estate investors to cut their teeth in this industry. The real estate wholesaling strategy is when one investor gets a property under contract and assigns the contract for a fee to another investor.
Real Estate Wholesaling Strategy | Investments
When executing the real estate wholesaling strategy, the only investments or costs to the wholesaler is the advertising costs. The investor utilizing the real estate wholesaling strategy should not invest any money into improving the property. Their job is to simply get the property under contract, advertise the property, assign the property for a fee, and collect the profits. This real estate wholesaling strategy requires none of your credit to acquire.
Real Estate Wholesaling Strategy | Property Types
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There are two ways to get a property under contract using the real estate wholesaling strategy: discounted property and mortgage assignment. Discounted property is distressed property that cannot sell on MLS due to the repairs needed. Therefore, the property must sell under market value to a flipper who can fix and resell. The job of the investor using the real estate wholesaling strategy is to get this type of distressed property under contract, find the flipper, assign the contract, and collect the profits.
Mortgage assignments are when you find a motivated seller and negotiate purchasing the home leaving the owner financing in place. Then you find an end buyer who cannot qualify for traditional financing and assign this contract to the end buyer for an assignment fee. This type of real estate wholesaling strategy is gaining popularity due to stringent lending requirements from banks.
Real Estate Wholesaling Strategy | Conclusion
In conclusion, the real estate wholesaling strategy is a great place for beginning real estate investors to begin their career. They can either look for distressed properties in poor condition or distressed homeowners looking to sell their house with owner financing. In today’s economy, understanding how to properly utilize either real estate wholesaling strategy will lead to real estate riches.
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