Investing in real estate is a lot easier when you have multiple options for getting a return on your money. For many, house flipping and income property development are just the tip of the iceberg, with the real money in their profit margins coming from the volume sales of wholesale properties. Understanding how this market works and who to approach when you have a prospective sale is the key to breaking in, and most of the prospective buyers are going to be other investors.
What Is Real Estate Wholesaling?
When you sell properties directly to another investor or developer at a rate that still allows them to profitably develop out the land, that’s wholesaling. Depending on your state, there are a variety of rules around the practice, especially for those without a real estate license. Most states make it difficult if not impossible to openly market wholesale properties without a real estate license or the help of someone who has one. It is possible, though, especially for those who have a wide social network and the ability to build the wholesale leads real estate sales depend on.
How To Start Wholesaling and the Benefits
The first step to wholesaling successfully is understanding what kinds of properties work best for this manoeuvre. Check out the housing market in Augusta County for example where there is a huge range of different properties available for your needs.
The second is figuring out how you can legally move wholesale properties if your marketing methods are limited because of state laws around licensing. It helps if you invest in the real estate lead generation software that exists to identify both motivated buyers and sellers, so you can start matching one to the other. That is essentially the role of the wholesaler, and there are a few benefits.
- Less time spent improving properties and marketing them generally
- Fewer fees paid out to realtors if you are unlicensed
- Lower property holding times for short-term acquisitions
- Wholesaling acts as a secondary market for properties that do not match your primary investment model
- It lets you shed properties profitably when you need to focus on a big project
- Pure speculation is often the lowest labor way to make money in real estate
So where do you begin if you have no experience and no leads to start with? If you are a new investor wanting to get started in wholesaling right away, you need a method of shortcutting the usual networking process. You can backfill that important information about the community later. The solution is to check out the free trial list real estate leads put out by the top lead generation services. They give you the intelligence you can work on for a deal or two, and when you see a service pan out it is easier to convince yourself to pay for the premium leads you need to make your next deal.
Get Started Today
Before you will have any idea what to buy, you need to know who is selling, who might sell, and which neighborhoods in your area are heating up. All that information takes lead generation, so the first round of research you do after establishing the market basics should be to generate that specific and actionable data you can use to find buyers and sellers.