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Wholesaling Real Estate for Beginners

Wholesaling Real Estate For Beginners

can be a great way to get started in the industry. While it is not without its challenges, wholesaling can be a great way to learn the ropes and make some money in the process. Here are a few things to keep in mind if you are thinking about wholesaling real estate for beginners.

What is real estate wholesaling?

Wholesaling in real estate is when a real estate investor contracts a home with a seller and then flips that contract to an interested buyer. Most often, wholesalers play the middle-man between people who want to sell their homes quickly for cash and other real estate investors who are looking for good investment properties.

The first thing to understand about wholesaling real estate is that you are not buying the property for yourself. You are acting as a middleman, finding a property that someone else is interested in and then selling it to them for a higher price. This can be a great way to make some money, but it is important to understand that you will need to find properties that are undervalued in order to make a profit. This can be a challenge, but it is possible to find good deals if you know where to look.

Another thing to keep in mind is that wholesaling real estate requires a bit of legwork. You will need to find potential buyers, show them the property, and then negotiate a price that works for both of you. This can be a lot of work, but it is also a great way to learn about the real estate market and how to negotiate prices.

If you are thinking about wholesaling real estate for beginners, there are a few things to keep in mind. Wholesaling can be a great way to get started in the industry, but it is important to understand the process and find good deals. With a bit of legwork, you can make a profit by wholesaling real estate for beginners.

The Pros and Cons of Wholesaling Real Estate

What are the pros and cons of wholesaling real estate? Let’s walk through the main ones.

Pros of Wholesaling Real Estate

  • Low cost to get started. You can start by spending just a couple of thousand dollars on mailers to find your first deal.
  • Learn about real estate investing. As a wholesaler, you’ll get to learn the ins and outs of real estate investing without investing hundreds of thousands of dollars.
  • Great ROI. Wholesaling offers an awesome return on investment. If you market well and have good data management, then you can make $5,000 to $50,000 per deal. And most deals only take a few weeks to close and a couple of thousand dollars in marketing costs.

Cons of Wholesaling Real Estate

  • Unpredictable income. This is true of any type of business. When you start, as you’re learning to ropes, you’re probably going to have a less predictable income than you did at your W2 job. But that’ll even out as you create good processes for managing your data, generating leads, and closing deals.
  • Doesn’t build net worth. Wholesaling is a great business model for generating revenue quickly, and you can turn that revenue into longer-term investments down the road, but wholesaling itself isn’t going to increase your net worth.
  • Requires good processes. Since wholesaling requires you to consistently generate leads, find motivated sellers, negotiate terms, and close deals, growing a wholesaling business depends on having good internal processes. The more automated and systemized your business is, the easier it’s going to be to grow.

How To Build a Real Estate Wholesaling Business From Scratch (5 Steps)

Now let’s talk about how you can build a wholesaling business from scratch.


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Step 1. Identify a Profitable Wholesaling Market

The first step is to decide where you want to build your wholesaling business.

Ideally, you’ll want to operate where there’s a good amount of people who are buying and selling real estate. The good news is that almost any city will work… because where there’s a city, there are people who want or need to sell their home quickly for cash.

If you’re in a very rural community, then you might consider moving to a city or pursuing virtual wholesaling

Just remember: the bigger the city, the more opportunity there is for wholesalers.

However, state laws matter as well. Some states make it easy to wholesale while others place stringent restrictions.

So you’ll want to consider your local regulations. If there’s not much opportunity for wholesaling in your local market, you could always build a virtual wholesaling business!

Step 2. Create a Lead-Gen Marketing System

Wholesaling requires a consistent flow of leads.

When you’re not generating leads, you’re not closing deals. And when you’re not closing deals, you’re not making money.

For your first deal, you can just send a few thousand mailers, find a buyer, and close the deal to get familiar with the process.

But if you’re going to wholesale real estate over the long-term, then you need to have a process for generating leads. The less work it requires and the more systematic this process is, the easier it’ll be to scale.

Here’s what this means practically.

  • Send Mailers Every Month — Direct mail is by far the most common way that wholesalers generate leads. You can send mailers to eviction, probate, divorce, pre-foreclosure, absentee owner, and other relevant lists. But you’ll want to do this consistently (every month or every week) to keep the flow of leads coming.
  • Build Your Online Presence — Your job is to attract as many motivated sellers as possible. In 2021, having an online presence is an important part of that. Create social media profiles for your business, build a website, and even consider running Facebook Ads and Google Ads.
  • Skip Trace High-Value Records — Finding contact information for your prospects can be challenging. But skip tracing (a process that was previously used by the government and bounty hunters to find criminals) is a great way to find phone numbers for your prospects.
  • Use Other Marketing Tactics — There are a lot of other marketing tactics you might consider trying, such as cold calling, driving for dollars, and even getting your website to rank in Google for high-value phrases. Whatever you decide to do, put your time and money toward whatever is generating the most deals, and remember to be consistent.
  • Answer The Phone — This might sound obvious, but answering the phone when it rings is super important for making the most of the leads that you’re generating. When someone calls, you need to be available, even if that means hiring someone to take calls during your off-hours.

Wholesaling Vs. House Flipping

The two most common ways to make money in real estate are wholesaling and house flipping. Both have their pros and cons, but they’re very different businesses. Here’s a quick overview of each:

Wholesaling — Wholesalers find deeply discounted properties (often from distressed sellers), put them under contract, and then sell them to another investor. Wholesalers typically don’t own the properties they sell, and they make their money by pocketing the difference between the contract price and the selling price.

Flipping — House flippers buy properties, renovate them, and then sell them for a profit. Flippers typically finance their deals, so they typically have to wait longer before they see a return on their investment. However, the potential profits can be much higher than wholesale.


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Which one you choose largely depends on your goals and experience level. Wholesaling is a great way to get started in real estate investing if you’re looking for an easy way to make money with minimal risk. But if you’re looking for a more high-risk, high-reward business model, wholesaling may not be the right choice for you. As always, it’s best to consult with a real estate professional before making any big decisions.​

How to do Real Estate Investing?

If wholesaling real estate for beginners is something that you’re interested in, there are a few things to keep in mind. Firstly, it’s important to be consistent with your marketing efforts and make sure that you have a process for generating leads.

This might mean sending mailers every month, building an online presence through social media and advertising, and utilizing other marketing tactics like cold calling, skip tracing, and driving for dollars. Additionally, it’s essential to be responsive when you receive a lead – whether that means hiring someone to answer your calls or being available to answer them yourself.

Whether wholesaling is the right real estate investing strategy for you also depends on your goals and experience level. If you’re looking for a low-risk way to make money, wholesaling could be a good option. However, if you’re more interested in a high-risk, high-reward business model, wholesaling might not be the best choice.

As always, it’s best to consult with a real estate professional before making any big decisions.​

 Simple Ways To Invest In Real Estate

Investing in real estate can be a great way to build wealth, but it’s not always easy to get started. If you’re thinking about investing in real estate, here are a few simple ways to do it:

1. Buy a rental property.

As a rental property owner and landlord, your main goal is to end each month with a positive cash flow. To understand if a rental house is a smart investment, you need to understand the costs involved and estimate your potential return on investment.

 2. wholesaling

Wholesaling real estate is one of the simplest (and quickest) ways to get started in real estate investing. As a wholesaler, you purchase properties under contract, then resell them to other investors at a higher price. This can be a great way to make money with minimal risk, as wholesalers typically

3. House flipping

Another way to invest in real estate is by flipping houses. As a house flipper, you buy properties that need repairs, then renovate and sell them for a profit. This can be a great way to generate returns on investment quickly, but it does come with higher risk and requires more upfront capital.

4. Invest in real estate crowdfunding

Real estate crowdfunding platforms allow you to invest in real estate projects without having to go through the traditional process of becoming a landlord or property owner. This can be a great way to invest in real estate with minimal risk and high potential returns.

 

 


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