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If You Love Digging Up Bargains – You Could be Wholesaling Real Estate

If You Love Digging Up Bargains You Could be Wholesaling Real EstateAre you an avid garage or yard sale shopper? Does it make your day to find an item that’s priced below its true value and then argue down the price a little more? Have you resold some of your booty at a profit, either online or in person? If so, you could be ready to up your game and your transaction size dramatically. You fit the profile of a successful real estate wholesaler. By the way, you may not need to buy homes before you sell them.

What is Real Estate Wholesaling?

The best way to explain the process is to relate it back to our normal concept of retail wholesaling. When you shop in the local grocery store, all of that stuff on the shelves was stocked there by a wholesale supplier. The wholesaler deals with the manufacturers to buy in very large lots, stores the items in warehouses, and then transports smaller lots to the stores. The wholesaler works on low markup, making their profit from the large quantities supplied to stores on a regular basis. It is expensive to maintain warehouses, trucks, and employees.

When it comes to residential real estate wholesaling, you’re going to avoid almost all of the costs of the traditional wholesaler. You’re not going to need a warehouse, nor a truck, as the house isn’t going to be moved. You don’t need employees either. Basically, you can operate from your kitchen table with a computer and the internet. If you don’t have a kitchen table, go to the library.

Success Requires Buyers

You’re going to start at the tail end first. You need to meet and cultivate relationships with real estate investors who will become your customers for homes. They are of two types: Rental home investors or fix and flip investors. The difference between the two is the condition of the home you’re selling. The rental investor wants a home ready for a tenant, while the fix and flip investor will be doing repair and rehab to fix up a home and profit from the work.

You need to get your buyers to give you their requirements, including:

  • neighborhoods of interest
  • desired profit margin on a flip or desired rental cash flow

Once you have this information, you’ll know what they’re willing to pay for a home, and you can move to the next step. Once you have buyers waiting for you to deliver properties, you’re ready to have that bargain-hunting fun.

The Real Estate Wholesale Process

Now you go out and find deals that your buyers are unable or unwilling to locate themselves. Often they’re very active investors who prefer to have deals come to them. Using the classifieds, Craigslist, neighborhood signs, or just driving around, you want to find homes with motivated sellers. They may be in financial trouble, or they may need to move in a hurry to get a better job. Whatever the reason, they’re motivated to sell in a hurry.

Of course, you want to locate homes with enough equity to buy them and resell them to your buyers with a profit in the middle for you. As you’re not going to do any work on the homes, your holding period is a matter of a few weeks, so it’s a quick flip for profit. You know the price your buyers will pay, so you work down the purchase price until your desired profit is in the middle.

How to Fund the Deal

Depending on the state in which you’re doing deals, you may be able to do assignment contracts to fund your deals. An assignment is a contract with the seller that allows you to assign your rights and obligations in the purchase contract to another buyer. Once you have the contract signed with the seller, you can execute another contract with your buyer that assigns them your rights and obligations. You’re out of the deal at this point, simply waiting for your profit paid to you when your buyer closes the deal.

If you can’t do assignments legally in your state, you can still do these deals with little or no money, but you’ll have to use transaction lenders. These lenders specialize in working with real estate investors, funding short term flips and deals like yours. You execute a purchase contract with the seller with you as the buyer. The transaction lender funds the deal at closing. When your buyer closes on buying the home, the transaction lender gets their fees and money back from the purchase. Your profit is what is left.

This is a simplified description of wholesaling real estate, but it should be enough to get you excited about it. It’s the ultimate bargain hunting pastime.

Hot Key West Business Opportunities

6440 Maloney Avenue $12,000,000

6440 Maloney Avenue Stock Island, Florida

9,418 SqFt

1622 Overseas Highway $9,900,000

1622 Overseas Highway MARATHON, Florida

3,400 SqFt

59073 Overseas Highway $7,990,000

59073 Overseas Highway MARATHON, Florida

2 Beds 22,069 SqFt

919 - 921 Duval Street $3,995,000

919 - 921 Duval Street KEY WEST, Florida

9 Beds 6 Baths 4,173 SqFt

3574 Overseas Highway 1-7 $3,750,000

3574 Overseas Highway 1-7 MARATHON, Florida

5 Beds 5 Baths 8,413 SqFt

99304 Overseas Highway $3,700,000

99304 Overseas Highway KEY LARGO, Florida

7,651 SqFt

100150 Overseas Highway $2,900,000

100150 Overseas Highway KEY LARGO, Florida

2,436 SqFt

1124 Labat Lane $2,450,000

1124 Labat Lane Cudjoe, Florida

4 Beds 4 Baths 2,693 SqFt 0.160 Acres

217 La Paloma Road $2,445,000

217 La Paloma Road KEY LARGO, Florida

4 Beds 3 Baths 2,784 SqFt 0.210 Acres

909 Frances Street $2,150,000

909 Frances Street KEY WEST, Florida

3 Beds 3 Baths 1,728 SqFt 0.040 Acres

19269 Bad George Road $1,650,000

19269 Bad George Road Sugarloaf, Florida

6,205 SqFt

8349 Overseas Highway $1,499,000

8349 Overseas Highway MARATHON, Florida

2,179 SqFt

188 La Paloma Road $1,400,000

188 La Paloma Road KEY LARGO, Florida

3 Beds 2 Baths 1,392 SqFt 0.150 Acres

372 Mahogany Drive $1,350,000

372 Mahogany Drive KEY LARGO, Florida

4 Beds 3 Baths 1,661 SqFt

916 Red Bird Road $1,250,000

916 Red Bird Road KEY LARGO, Florida

5 Beds 3 Baths 2,556 SqFt 0.110 Acres

Are You Looking for Commercial Property in the Florida Keys?

Use our site to search commercial real estate in Key West and all of the Florida Keys. Unlike the “big name” sites out there, our site is directly connected to our local MLS and is updated with new properties every HOUR. By creating a Property Manager account you can stay on top of the newest businesses that go up on the market and get Price Change alerts so you can stay ahead of other buyers and beat them to the best deals!

In the meantime, check out these 1-click searches:

  • All Businesses for Sale
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  • Bars & Restaurants
  • Marinas for Sale in Key West
  • Investment Properties
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Newest Key West Commercial Properties on the Market

Fantastic lease opportunity for your business in one of the best locations in Key West downtown next to Mallory Square & Sunset Celebration, Custom House Museum, Mel Fisher treasure Museum, Key West Aquarium, Tourist Information Centre, and nearby resorts like the Opal Hotel, Ocean Key and Pier House and other hotels. High traffic location with cruise ship passengers and tourists using the old town train & trolley stationed right across the street! Ground level storefront with large display windows and approximately ~1250 sf of retail space with an additional ~900 sf of space that could be combined next door for a total of ~2150sf . In addition to the monthly base rent quoted, tenant pays NNN fees plus sales tax. $8,300 Active

308 Front Street KEY WEST, Florida

1 Baths 9,411 SqFt

Fantastic lease opportunity for your business in one of the best locations in Key West downtown next to Mallory Square & Sunset Celebration, Custom House Museum, Mel Fisher treasure Museum, Key West Aquarium, Tourist Information Centre, and nearby large resorts like the Opal Hotel, Ocean Key and Pier House and other hotels.High traffic location with cruise ship passengers and tourists using the old town train & trolley stationed right across the street!  Ground level storefront with large display windows and approximately ~900 sf of retail space with an additional ~1250sf of space that could be combined next door for a total of ~2150sf . In addition to the monthly base rent quoted, tenant pays NNN fees plus sales tax. $6,000 Active

304 Front Street KEY WEST, Florida

1 Baths 9,411 SqFt

Prime redevelopment opportunity! Located in a rapidly changing area of Stock Island, this Mixed Use zoned property has many viable uses. Current uses include a small commercial storefront and a residential apartment. With some creative vision, this 10,039 square foot lot is a diamond in the rough nestled only a couple of blocks away from the famous Perry Hotel and Marina complex along with Bernstein Park. Please call today for additional information. $1,000,000 Active

5515 5Th Avenue Stock Island, Florida

1 Beds 1 Baths 3,367 SqFt

Location Location! Excellent Opportunity to join the thriving & attractive business environment the 300 block of Duval has to offer. Approximately ~1600sq.ft. of retail space available with parking and a private outdoor courtyard area with an additional 275sq.ft., 335-F Duval Street.  Located in the heart of the Key West Duval St. tourism district with heavy foot traffic passing by. Monthly rent quoted is not negotiable, 4% annual increases apply, triple net charges & sales tax are included in the monthly rent quoted. Please do not disturb business. $13,602 Active

335 Duval Street F KEY WEST, Florida

1 Baths 1,600 SqFt

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Posted in: Buying Commercial Real Estate, Commercial Real Estate, Investing, Sellers, Wholesaling, Wholesaling Tagged: Wholesale, Wholesale Real Estate, wholesaling real estate, wholesaling real estate tips

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