Real estate investing is one of safest and most misunderstood forms of investment. Getting started in real estate investment can be somewhat intimidating and confusing for beginners and can easily be disastrous if you do not know what you’re doing. It may come as a shock to those not well versed with real estate investing but it is entirely possible to start making big bucks in real estate without actually buying property. This little known secret of real estate investing is called wholesaling and it can easily lead to substantial, almost risk free profits.
Even if you do not have a clue what you’re doing, it’s entirely possible to make a killing with wholesaling. In addition to being a great way to earn a lot of cash quickly, wholesaling is actually a great way to begin a career as a real estate investor. Starting out as a wholesaler gives you the chance to learn the particulars of real estate transactions such as paperwork, negotiations, property valuations, and improvement costs. In order to do well as a real estate investor you need to be well versed with all of the details of investing and wholesaling gives you that opportunity.
So how exactly does real estate wholesaling work? It all begins by locating an unappealing and probably vacant home somewhere in your area. Once you have found the home you will need to assess its after repair value using the best available market data. After you assessed the home’s value you will then need to contact the present owner. The county you live in will have these records available to the public and you can usually find this information online by visiting the relevant agency’s website. In my county, for example, I can locate ownership records on any home in about two minutes.
After the homes owner has been located you will need to make an offer on the house. The price you offer should be about half of what the home will be worth after all repairs have been performed. You can make your offer to purchase the home risk free by including a clause in your offer to purchase stipulating that another real estate investor must be found in order for the contract to be valid. Your purchase clause should allow two weeks for you to find a buyer.
Then you need to start contacting investors in your area who specialize in home rehabbing. Contact as many as rehabbers as you can find and then set the price at slightly above what you offered the homeowner. So if you offered $ 50k to the homes owners you would tell rehabbers that the home is available for $ 55k. The difference between the contract price and the price sold to investors is your profit. You can find home investors by looking at local advertisements for people people who buy homes. If you live in a major metropolitan area, you should have no problems locating both home investors and dilapidated homes. Once you make your first profit doing this you will never look at dilapidated homes the same way again!