What Is Wholesaling Real Estate?

August 18, 2022

What Is Wholesaling Real Estate?

Wholesaling real estate is a phrase you may have heard before if you’re interested in real estate. If you’ve considered getting into real estate investing, you’ve likely seen this term here and there, but for beginners, you may be unsure of what this means.

Troy Kearns is a real estate investor and mentors various services for individuals looking to find financial freedom. In this blog from his network, you’ll learn more about how real estate wholesaling could be a good route for becoming a real estate investor.

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The Basics Of Wholesaling Real Estate

When you typically think of real estate, you likely imagine someone working with a real estate agent to list and sell their home to a buyer who likely has their own real estate agent. Or, you might imagine someone who sells their home on their own to a buyer.

Wholesale real estate works somewhat differently. This process is when an individual gets a contract from someone selling a home or property to act on their behalf. This individual is the wholesaler. They will take the contract to a buyer.

So, the wholesaler sells the home to a buyer for their owner, but they do not actually own the property themselves. They often find cash buyers to make the process even simpler.

In exchange, the wholesaler makes money through a fee that’s part of the contract. This fee is usually a percentage of the sale.

Why Wholesaling Real Estate

Wholesale real estate is usually done to sell less desirable properties. These could be homes that need a lot of work or have other issues. The owner doesn’t want to go through the process of getting the property ready to sell, so instead of working with a real estate agent or dealing with the real estate market, they work with a real estate wholesaler.

Wholesaling Real Estate Works For Buyers, Too

As far as the buyer is concerned, they are often individuals who are into real estate investing or home flipping but do not want to deal with the process of finding sellers.

Basically, the real estate wholesaler acts as a middle point between the two, which can benefit all three parties. The real estate investor also benefits because they don’t have to worry as much about the market value of properties.

Example Of Wholesaling Real Estate

While the definitions might get a bit confusing or technical, think of the process as the wholesaler getting a property at a discount and selling it for a profit by going directly to the buyer who is willing to pay a higher price.

It can be a more specific market, but it is a niche in real estate that has become more popular. There are many investors who have seen success with wholesaling.

Do Real Estate Wholesalers Need A Real Estate License?

You will have to double-check the laws and regulations in your area, but generally, you don’t need a real estate license to be a wholesaler. This is one of the benefits of this kind of real estate investing. You don’t have to go through the process. of becoming an agent because you’re not dealing with the sale in the same way.

It’s also worth noting that real estate wholesaling is legal because the wholesaler doesn’t own the property and isn’t selling it. Instead, they are acting as a middleman to sell ownership over the contract.

Benefits Of Becoming A Real Estate Wholesaler

For people new to real estate investing and the real estate industry, getting into real estate wholesaling could be a great move. Unlike flipping homes or becoming a real estate agent, the process tends to be faster to learn and execute. Some of the specific

Benefits of real estate wholesaling include:

  1. Becoming real estate investors much faster than other methods
    While other options for investing in real estate can take months or longer, you don’t need as much knowledge or training. It’s easy to get started after just doing some of your own research.
  2. Getting money quicker
    Generally, real estate wholesaling leads to quicker payments. Instead of dealing with constructing or updating properties, you’ll see the sales go through faster and get your fee. You could even get paid in less than a day if you set up the right deal.
  3. Receiving financial benefits regardless of your assets:
    Even if you have poor credit or don’t have alto of money saved, you can become a real estate wholesaler. You aren’t purchasing any property, so you don’t need to be the one with a lot of extra money.
  4. Filling a demand:
    While real estate markets vary from place to place, most areas need wholesalers. This is because lots of other investors don’t want to handle distressed homes and other properties. Because of the higher demand, you won’t have as much competition from other investors.
  5. Avoiding listing and membership fees:
    Because wholesaling deals with contracts, you don’t need to list the property for others to see. This means you don’t have to seek out the public to sell the property or use the MLS. You also won’t be working with any specific organization that requires fees or more constricting regulations.
  6. Keeping yourself from the work of repairs:
    While some people find success with flipping homes, the main downside is the effort and money that goes into the upgrades and repairs. Instead, you’ll be working with buyers who want to do this work themselves, but you won’t have to do it.

Other Pros Of Wholesale Real Estate

These are just some of the potential benefits for real estate wholesalers. Another big one is that these deals can be done anywhere, so you can conduct a lot of the business over the phone.

If you want a more straightforward way to become a real estate investor, becoming a real estate wholesaler might be the perfect fit.

Assistance With Real Estate Investing

If you’re new to real estate in general or wholesaling, you might be looking for a mentor with extensive experience as and with real estate investors. Troy Kearns offers a vast library of Youtube videos and other content to get you started, and you can also sign up for a mentorship service.

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