Wholesaling Real Estate

By: Than Merrill
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There are many different niches of real estate investors specialize in. Some investors prefer rehabbing, others choose to lease option, and others only buy and hold. All niches can be extremely profitable if you educate yourself and purchase the property below market value. However, in my opinion wholesaling is where all investors should start out. (In fact, you will be deemed clinically crazy if you start out in any other niche.) In this series of articles I will discuss the benefits of operating as a wholesaler.

Wholesaling Produces Quick Cash

One of the great things about wholesaling properties is the deals can happen relatively quickly in contrast to other value added exit strategies like rehab projects and other larger developments. Anytime you get involved in developing or redeveloping properties, the timelines are much longer, and the checks can be far and few between. Wholesaling, on the other hand, generally produces revenue within five weeks or less depending on the magnitude of the transaction. The average time your wholesale deals will take from start to finish is about five weeks to complete. That includes every aspect of the deal from the time you put the property under contract until the time you are cashed out by your ultimate buyer. There have been deals Paul and I have been in and out of in a week, but these are the exception rather than the norm. Either way, you will not find any other niche of real estate with timelines this short.

Wholesalers Have Very Little to No Risk

Real estate investing always involves some level of risk. Your job as an investor is to always understand those risks and try and minimize them in any way you can. Wholesaling, on average, is not nearly as risky as some of the other niches of real estate. This is one of the main reasons I encourage most new investors to start out wholesaling properties. As a wholesaler you can eliminate 99% percent of the risk if you educate yourself properly. In fact, if you know how to fill out a purchase and sale agreement correctly, you should be able to structure deals with virtually no risk at all. 90% of the properties I put under contract have a deposit of less than $500 dollars and an inspection clause which would keeps my deposit safe if I am not able to find a buyer for more than I have agreed to pay. Often these clauses are written in the form of an inspection contingency. Many of the contracts I sign with sellers give me an inspection period up until the day of the closing. This is a very one sided contract, however we as investors should never be afraid to protect ourselves in every way possible.

In summary, for $500 dollars or less I can control a property worth hundreds of thousands of dollars for a certain period of time. I will have the ability to sell the property for more and collect the spread with virtually nothing on the line. Where else can you earn tens of thousands of dollars with little to no risk what-so-ever? Nowhere! The only risk you have as a knowledgeable wholesaler is your time.

Wholesaling Has Unlimited Income Potential

Wholesaling is the perennial wealth builder, and the transition from working a job for pennies, to achieving unlimited wealth through real estate is an obtainable goal and increasingly well documented. There is no secret that a lot of people choose to go into real estate because of the endless opportunities for enormous wealth. I know plenty of wholesalers who made over $200,000 in their very first year working the business with no prior real estate experience at all. I also know plenty of wholesalers who make over a million dollars a year every year they remain in the business.

Want to learn more, get the entire story on the Dan Reedy Radio show Saturday March 20th at 9 am on 1510 AM in the Kansas City Market and then again on Saturday March 27th at Than's all day Workshop at Johnson County Community College.  Workshop is $20 at the door, but you can preregister for $10.  If you want to go for FREE, click here for details.