Is Wholesale Real Estate Effective For Newbies?

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The wholesale real estate has become a hype nowadays and been considered as the entry point for those who want to start their career in the real estate. Though most of the investors have started their career from the wholesale real estate and many of them have remained successful in building a good career, it does not mean wholesaling is easier.

Before you assume that wholesaling is something every real estate investor can begin his career with, we would like to remind you that it is not easy. There are some steps towards facilitating a wholesale deal, which every investor needs to follow, regardless he is an experienced one or a fresher. And as far as its effectiveness for the newbies is concerned, it totally depends on the strategies they follow throughout the deal.

However, before we begin with the steps of facilitating a wholesale deal, here is the small introduction to wholesaling and the things which make it a good option.

What is real estate wholesaling?

Wholesaling is a process in which you buy a property (having signs of distress) at a rate that is below the market value. Then you fix the property and sell it, or you resell it as it to an investor again below the market value. The profit you earn in such a deal is the difference of your contract prices with the seller and the buyer.

And if you are thinking about the reasons which make wholesale real estate a good option, there are mainly three which we have mentioned below:

  • You need a smaller amount for investing in the wholesale real estate as compared to other real estate options. And as most of the newbies don’t have enough capital for investments, wholesaling is what they can think of starting their career with.
  • The real estate wholesalers do not need to make many efforts for marketing the properties.
  • Though the risks in wholesaling are same as that of other real estate deals, they are not as substantial.

Basic steps involved in the wholesale real estate

Real estate wholesaling is not that much difficult; however, it takes persistence to get success. And the basic steps which are involved in wholesaling are:


  • Finding the deal


Being a beginner, it can be quite tough for you to find your first house. But if you are aware that where you can find your deals and what you need to look for, you can successfully hit the nail. Foreclosure deals, online listings, driving for dollars and direct mailing are some of the ways to find distressed properties.


  • Carrying our inspection and determining if the property is worth


So, you found a distressed property and now, it is the time to check if the property is worth. Have a look at the similar properties in the area and check the price they are sold for. A basic inspection and comparison will let you know what the particular property is worth for.


  • Making an offer


Once you have done the comparison, you can easily guess the current value and the after repair value of the house. Accordingly, you can make an offer to the seller. Usually, the chosen offer value is lower than the actual market value of the property.


  • Submitting the contract


If the seller accepts your offer and is agree with the price you are willing to pay for his property, you can submit the contract. You can seek the help of a closing agent for submitting the contract.


  • Finding a buyer


Next step is finding the buyer and you can do this easily through proper advertising of the property. You can list the property on the listing website, with the real estate agents and even can take help of your social media accounts.  


  • Creating an agreement


After finding a buyer, your next step would be creating an agreement which will be created only when you and the buyer agree on a particular property value.


  • Closing the process


During this process, you need to coordinate almost everything. For instance, you need to ensure that the buyer has submitted the money, the closing agent has communicated with the seller and all the paperwork is completed.

Wrap Up

Thus, the process of the wholesale real estate is almost the same as that of other real estate deals. As a beginner, you just need to be smart and capable enough to understand what makes a deal good. Also, you need to be aware of the marketing tactics as it is your marketing efforts only that will let you find the right buyer.

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