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3 Steps to Make Money Wholesaling Real Estate

3 Steps to make money Wholesaling Real EstateFlipping houses is all the rage, fed by several popular television shows with high profile flipping personalities. It looks like fun, and it can be. You can use the fix-and-flip strategy, but this article is about wholesale flipping. The wholesaler has no intention of doing anything to the home. They buy and resell the homes with a profit for themselves in the middle.

The wholesaler’s value to their customer is in locating properties that their buyer wants and can buy at a price below current market value. Since their buyers are usually either fix-and-flip investors or rental home investors, everybody involved is market-savvy, and the wholesaler can only add value to the transaction if they can locate properties that their buyers cannot or are not willing to make an effort to locate.

The Fix-and-Flip Buyer

This is another real estate investor who wants to buy properties that need repairs and rehab, usually a significant amount of work. They profit through buying right and from the markup on their rehab work. As they often sell to a rental investor, this runs everyone’s numbers down, as that rental investor buyer wants to buy a value property as well.

The Rental Home Investor

This is the end user of the property, intending to profit from cash flow and appreciation in value over time. The rental investor buyer wants a tenant-ready property, not wanting to do any work on it other than minor cosmetic repairs. They also want to buy below market value to lock in a profit at the closing table.

Step 1:  Find a Buyer

This is where the “back to front” in the title applies. You start with the deal-ending sale to work your way backward to the purchase of the home. The successful wholesaler holds a property for a very short period, intending to profit from their ability to locate deals and negotiate a price that will provide a profit in a quick sale.

You must know approximately what a buyer will be willing to pay for homes and in what neighborhoods before you begin your property searches. To gain this knowledge, you must know some buyers, and this is why successful wholesalers build buyer lists. They advertise in classifieds, on Craigslist, and some join real estate investment clubs to meet other investors. They meet and get information from rental property investors about their property location, cash flow, and appreciation requirements. Having ready buyers with cash and knowing what they want, then the wholesaler can move backward to their profit desires before they seek out properties.

Step 2:  Set Your Profit Goal

Using an example, you have a rental property investor buyer always seeking properties. You know her favorite neighborhoods, home sizes, and price range. You also know that she wants to buy homes at a 10 percent or better discount from current market value, and they need to be rent-ready.

You want to set your profit goals, and this is individual, and it’s all up to you, though you do have to respond to market forces. You could just set a dollar amount per deal, as wholesaling is a fast turnover profit if you line up buyers first. Maybe you want to make $5,000, or maybe a percentage of the purchase or sale price. It’s your decision. Be careful and don’t be too optimistic, as you want to allow for error.

Step 3:  Locate and Buy a Property

Now you start marketing and working your sources for distressed homeowners who for whatever reason need to sell their homes but haven’t been able to do so. Maybe they have a job opportunity and need to move in a hurry. Perhaps they have a need for money for an emergency. Whatever the reason, you must find someone with enough equity in a home to meet your goals and a need to sell quickly.

You start at the tail end with what a buyer wants and what they’ll pay. Then you decide on your profit goals, and you go out and find a property, negotiating a price that will meet your profit goals and the goals of your rental investor buyer. This is the recipe for successful real estate wholesaling from back to front.

Wholesaling properties can be a great way to make money with little to no investment. Learn 2 ways to fund a wholesale real estate deal with little to no cash.

Hot Key West Business Opportunities

1 Henry Morgan Road W 1 $38,000,000

1 Henry Morgan Road W 1 OTHER, Florida

99 Beds 119 Baths

1 Infinity Bay Road W 145 $28,000,000

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1 Media Luna Resort Road W 126 $26,000,000

1 Media Luna Resort Road W 126 OTHER, Florida

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$10,000,000

Other, Florida

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27340 Overseas Highway $6,900,000

27340 Overseas Highway Ramrod, Florida

3,969 SqFt

1 Lands End  West End Roatan W $6,750,000

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328 Whitehead Street $4,995,000

328 Whitehead Street KEY WEST, Florida

5 Beds 5 Baths 2,759 SqFt 0.330 Acres

7537 Overseas Highway $3,495,000

7537 Overseas Highway MARATHON, Florida

6,750 SqFt

91865 Overseas Highway $2,300,000

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15 Beds 10 Baths 10,150 SqFt

100150 Overseas Highway $2,100,000

100150 Overseas Highway KEY LARGO, Florida

58835 Overseas Highway $1,499,000

58835 Overseas Highway MARATHON, Florida

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1000 Eaton Street $1,200,000

1000 Eaton Street KEY WEST, Florida

1 Baths 989 SqFt

Pirates Road $799,000

Pirates Road Cudjoe, Florida

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Pirates Road Cudjoe, Florida

2.200 Acres

Pirates Road $799,000

Pirates Road Cudjoe, Florida

96,547 SqFt

Are You Looking for Commercial Property in the Florida Keys?

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Newest Key West Commercial Properties on the Market

Large commercial building in good shape with Dade County pine ceiling, zoned mixed use commercial, located in up and coming part of Marathon. Property has almost 19000 square ft of fenced in area with plenty of room for parking and located directly on US 1. There is a second building in back that has a bathroom, and living/bedroom area, that can be office space or storage. Lots of potential for the building and land. $1,650,000 Active

1825 Overseas Highway MARATHON, Florida

1 Beds 2 Baths 2,796 SqFt

Excellent Opportunity to lease small retail/professional space in Old Town Key West directly on Truman Avenue with approximately ~600sf. Join the charming & friendly business environment that Historic Downtown has to offer, catering to a diversity of local dining, shopping & specialty services. Visible storefront with display windows and heavy traffic flow. Sales tax and shared water expense are in addition to monthly base rent quoted for a minimum two-year lease agreement. Vacant and easy to show. $1,850 Active

1100 Truman Avenue A KEY WEST, Florida

1 Baths 2,600 SqFt

White Sands Inn is located in Marathon, FL on the Atlantic Ocean with views that will take your breath away.  Unfortunately, hurricane Irma took it's toll on the first floor of this little motel.  The owners have made most major repairs but ran out of money to complete the motel.  Currently being sold as-is with the new owner to complete the first floor.  The second floor was not damaged and occupied.  All reasonable offers will be considered.  Don't let this deal get away.  Seller has all plans and estimates to pass on to the new owner.  Most of the major work is completed.  Call for details.  Please do not visit the property without an appointment.  Property comes with 1 market rate (single family building right) and 4 transient motel rights. $1,450,000 Active

57622 Overseas Hwy Highway MARATHON, Florida

8 Beds 8 Baths 3,082 SqFt

Offered for sale is Vaca Cove a 7 unit vacation rental property located in Marathon, FL.  The property is comprised of 7 stilted waterfront homes, dockage accommodating up to 40' boats per home, resort sized pool, fishing dock/kayak launch and built in 2016.  Each home is 1,740 Sq. Ft., 4 bedroom, 3 bath, open floor plan living area, large laundry, water front porches with open water views, private spas and covered parking.  This is an active vacation rental property with established management and increasing numbers.  Please do not go to property unscheduled.  Call for more information. $6,900,000 Active

12555 Overseas Highway MARATHON, Florida

28 Beds 21 Baths 12,180 SqFt

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Posted in: Sellers, Selling Tips, Wholesaling Tagged: steps to wholesaling real estate, Wholesale Real Estate, wholesaling real estate, wholesaling real estate tips

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