The presence of a middleman is beneficial for the seller and buyer alike. They often act as intermediaries in a supply or transaction chain, promoting communication between the parties concerned. You will come across middlemen in every industry, be it retail, entertainment, IT, manufacturing, healthcare, and banking as well. Now, if you are interested in the real estate sector and possess all the required skills of a middleman, then you can explore your career as a real estate wholesaler.
Today, there are many websites on the internet that help connect property buyers with homeowners. Suppose an individual is seeking a villa for rent in Dubai. Then all one needs to do is head over to the real estate websites, share their preferences, and the results are available to them right away. However, not everyone looks for properties on the web to get the best deal. Some may simply seek the help of a local real estate agency or a real estate wholesaler to search for the right property. Haven’t heard the term ‘real estate wholesaler’ before? Well, read on to find out what real estate wholesaling is all about and whether you can think of a career in this field.
An Introduction to Real Estate Wholesaling
There are situations where a property’s current owner no longer needs it and is either unable to or unwilling to put out the time and effort necessary to get it ready for a conventional sale. Now real estate wholesalers are individuals who identify such distressed property owners and act as middlemen to facilitate locating their final buyers. The process starts with the wholesaler signing a purchase agreement with the property owner in exchange for a modest, earnest money deposit. The agreement specifies the price at which the wholesaler will sell the asset as well as the time frame within which it must be sold.
Now you must be wondering how a wholesaler earns money in this process. Well, here, the catch is the real estate wholesaler tries to sell the property for more money than what the contract calls for. Suppose the selling price of the property mentioned in the contract is USD 3,25,000. Now the wholesaler should try to sell the house at around USD 3,50,000. The difference between the contract price and the selling price, in this case, USD 25,000 is the profit that the wholesaler makes. Depending on the number of deals a wholesaler is able to close, this career can lead to handsome earnings in a relatively short time.
Real Estate Wholesaling – The Procedure
Though real estate wholesaling seems to be a lucrative option for making money without investing a hefty amount, you must have a thorough understanding of the ins and outs of this industry. You need to have strong networking skills, research for the happenings in your local market, attend various real estate events, and identify people to align with so as to succeed in this role. The process of real estate wholesaling will give you a better idea of what skills help close more deals effectively.
First off, you need to become familiar with the area you want to serve in. find out what the wholesaling laws are and research the neighborhoods where you intend to work. The next step is to create a buyer’s list, which contains the information of potential buyers interested in properties in your area. Note that good networking skills are quite helpful in finding buyers; the more people you know in the real estate industry, the better will be the leads you get.
After your buyer’s list is ready, it is time to find the sellers. Keep an eye out for distressed property owners who can be convinced to sell their house for a lower price than its market value. Some of the resources you can check out for this purpose are social media channels, local agencies, multiple listing services, and foreclosure websites. When you find the right sellers, explain to them the idea of real estate wholesaling, and finally reach the stage where they sign the contract with you. Mention the selling price in the contract after thorough research and start contacting the potential buyers. If the deal falls through in the given time, you will gain a healthy return. Your earning potential will grow as you continue to gain experience, expand your network, improvise your negotiating skills, and incorporate technology into your workflows.
So get ready to step into the world of real estate wholesaling now!
