for profit. Just like many businesses have a middleman that they buy their
products from, real estate wholesalers find the products (houses) for the end
user (buyers) and make a profit for doing so.
To keep it easy, I am going to compare real estate wholesaling to selling a
bike when you have no money to buy it.
In order to make money on any product you need to find the product for less
money than what you intend to sell it for. For conversation sake, let's say
you found a bicycle that you knew you could sell for $200 if you put the
pedals back on. Without the pedals you could sell the bike for $150. If you
had the money you could buy the bike for $100. The problem is you have no
money to buy the bike or the pedals. You are flat broke.
In the old days you would have had to walk away from this deal.Not with wholesaling, with wholesaling you don't need money or credit.
Instead you talk to the owner of the bike and make him an offer to buy thebike for $100. Then you tell the owner that you don't need to take the bike.
You would just like him to hold the bike for 3 days, and you will work on
finding the money to buy it. If after 3 days you don't have the money, he can
go ahead and sell it to someone else.
Once the owner agrees you call up Fred who you know is looking for a great
deal on a bike. You tell Fred, "Hey Fred, I found a great deal on a bike, this
bike will sell for $200 when you put the pedals on, you could buy some
pedals for $10 at the hardware". You go on to say "You are not going to
believe this Fred but I am selling this bike for $130". Fred says "Awesome,
when can I pick it up".
You call the owner of the bike and let him know that you will be buying the
bike as long as your friend says it has no problems. Then you ask him if you
could pick up the bike and have a friend look it over. Then you pick up the
bike from the owner and call Fred. Fred gives you $130 for the bike. You go
and pay the bike owner $100. The bikes owner is happy. Fred got a great
deal on a bike.
You made $30 for not spending a penny, all you had to do
was make a couple of phone calls.
Why is real estate wholesaling so great?
1.
You do not need to have good credit-With traditional real estate
investing not having credit can end up being a major problem.
Without credit you cannot get a loan, and without a loan you cannot
buy a home. There are ways to buy without credit such as lease
options, land contracts, and “subject to” financing. The problem with
these methods is in many cases the profits are not immediate like they
are when you wholesale real estate.
2.
Immediate earning potential- Real estate wholesaling will give you
the power to be earning profits in as little as 2 weeks. From my
experience there is no other job or opportunity out there that can have
you earning $3,000-$10,000 in the next couple of weeks.
3.
Limited risk-Real estate wholesaling is by far the lowest risk way to
get involved in real estate investing. If you set up your deals correctly
real estate wholesaling is a NO RISK way to do real estate investing.
The worst case scenario from a risk perspective is that you may lose
you deposit money which typically ranges from $100-$1,000. If you
follow my methods for real estate wholesaling you won’t even need to
worry about losing your deposit money.
4.
No money needed (Truly $0 down)- I know it may sound too good
to be true, but you really don’t need a penny to get going wholesaling
real estate. You may end up passing on some deals that require
deposit money but I will offer you some great ways to get around that.
