Why Wholesaling?
Real Estate is one of the most dynamic markets that is
available for the investor these days. You can make
money from real estate by buying, selling and or
holding the property as a rental. Particularly with the
volatile dynamics of the Real Estate Market, it is
possible to earn of thousands of dollars or more in
profits when buying or selling single family to multi-
family residential units as well mixed use properties.
One form of this real estate business is especially
rewarding when it comes to buying and selling real
estate:
This is called "Wholesaling".
Wholesaling real estate allows you to make money by
contracting to buy the property below its market value
and then selling it to another investor who rehabs it
and then sells it to an end user for their profit.
The important point here is to not take the property
in your name,but rather to just get the resell rights
(option to buy) to the property from its current owner.
Wholesaling for Dollars
As you can be see, wholesaling real estate can be a real
moneymaking business opportunity. There is a great
potential here for you to make money by your contracting
to buy it for a low price and selling it for a moderately
higher price to another investor within a few days.
How quick you can carry out this process will determine
your profit.Thus, you want to turnover ("flip") these
properties as quickly as possible. This is why wholesaling
is sometimes referred to as "flipping."
Guidelines for Wholesaling Real Estate
Here are some guidelines that will help when you are
wholesaling real estate.If you follow these guidelines
very carefully, you should be able to make a nice profit.
The best way to practice wholesaling is by looking for a
property that is in some kind of a distressed situation.
For example, people who are about to have their house
foreclosed on is a great opportunity for you.
You should also look for houses which are suitable for
rehabbing. This way the person who buys the house from you
will be able to make a profit As well, by rehabbing it and
then selling it to a retail buyer.
In the sales contract, under "buyer" you should write in
your name and/or Assignee. This will allows you to assign
the property to someone else. Actually, you are selling
the contract. This provides you the ability to move the
property and make a nice profit.
It is important that you do not take the property in your
name. If you close on the property in your name, you will
incur closing costs which in turn will increase your selling
price.You may incur transfer taxes and other closing costs
as well, potentially making it more difficult to to sell the
property. Now you are unable to assign this (contract)
property. You must now go through a sale yourself.
In order to lock up the contract, you will have to give a
deposit "earnest money" to the seller of the property.This
deposit does not need to be a large amount You can give a
deposit as low as $10. Typically, however, $100 is the norm.
This deposit should be held by the closing agent.
Make sure that you allow for ample profit for your investor.
You should not try to make a lot of profit on a single
property. Instead your goal should be to buy and resell
the house as quickly as possible. This way you will be
able to make more money by dealing with numerous properties
in a short period of time.
It is important that you use a title company that is
open to the needs of the investors. Working with such
a company will help you close the house much more quickly
and more efficiently.
Source: http://www.ArticlePros.com/author.php?Gino Napolitano
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