Real estate wholesaling is a popular strategy for investors looking to buy and sell properties quickly for a profit. However, the process can be daunting for those new to the industry. In this article, we break down the real estate wholesale process from sourcing to closing.
The first step in wholesaling a property is finding a motivated seller. This could be through networking with other investors, driving for dollars (driving around neighborhoods looking for distressed properties), or direct mail campaigns.
Once a potential seller is found, it’s important to determine the property’s value by doing a comparative market analysis (CMA). This involves researching recent sales in the area to determine what similar properties are selling for.
After determining the property’s value, it’s time to negotiate with the seller. This can include offering a cash offer below market value or negotiating a lower purchase price with the seller.
It’s important to build rapport with the seller and understand their motivations for selling. This can increase the chances of getting a favorable deal.
Contract and Assigning
Once an agreement is reached, it’s important to put the deal in writing with a purchase contract. The contract should include the purchase price, closing date, and any contingencies.
After the contract is signed, the property can be assigned to a buyer. This involves finding a buyer who is willing to purchase the property at a higher price than the wholesaler’s purchase price.
The final step in the process is closing the deal. This involves transferring the property’s ownership from the seller to the buyer.
The wholesaler’s profit is the difference between the purchase price and the assigned sale price. The wholesaler receives their profit at closing.
Real estate wholesaling involves finding motivated sellers, negotiating a favorable deal, assigning the contract to a buyer, and closing the deal for a profit. The process can be challenging, but with the right strategies and mindset, it can be a lucrative venture.