What is Real Estate Wholesaling?
Real estate wholesaling can be a great way to make money. Typically, wholesale real estate involves finding a property that is deeply discounted. The distressed homeowner sells the property to a wholesaler who will then resell the property to another investor or end user. In exchange, the wholesaler pays the owner, quickly, as-is.
However, it can also be a big risk if not done properly. This is why it’s important to have the knowledge and tools necessary to get started. There are several techniques you can use to become a successful real estate wholesaler.
Getting Started in Wholesale Real Estate
Whether you choose to work with a real estate agent, wholesaler, or yourself, the process is similar. You will need to find properties at a discount, and then negotiate with the seller for a price that you can afford. Many wholesalers use a variety of resources to help them locate suitable properties.
To become a successful wholesaler, you need to have strong communication and negotiation skills. You should also have a solid understanding of the local market. When you find a deal, it is important to act quickly. Otherwise, you could end up losing the earnest money. A good marketing strategy is key.
Another key asset for a wholesaler is a list of cash buyers. These are people who are likely to purchase a contract from a wholesaler. They are also an excellent resource for finding properties that are available at discounted prices. To begin the search, you should contact real estate agents and local investing groups. If you’re not in a big city, you can look for distressed homes in your neighborhood. Some foreclosures are suitable for wholesale deals, but it is recommended to speak with a lender before making a purchase.
Where to Find an Investment Property
Finding a wholesale real estate deal can be a lot simpler than you might think. You can start by searching online and you might even find a deal driving around your neighborhood. Regardless of the method you use, it is important to build a solid network of other investors in your area. Find active real estate groups and attend local investing meetings to learn the ins and outs of wholesaling.
How Does Financing work with Hard Money Lenders?
Hard money lending can be a great and fast way to fund a wholesale real estate investment. Short-term loans provide you with the speed you need. The quicker you close, the quicker you can resell to your fix and flip investor.
One West will finance a loan amount up to 70% of the after-repair value (ARV) of an investment property. Keep in mind, there are also closing costs. Generally, you can expect to pay between 3%-4% in closing expenses without taxes. We offer a 6-month renewable term loan with a 12%-16% annual interest rate. There is also a 2.5% origination fee and an application fee as well. We will only loan private money to a private entity such as an LLC.