One of the more common forms of real estate investors these days is a real estate wholesaler. With the collapse of the housing market in 2009, many investors have no taken on being a real estate wholesaler because it affords them the most opportunity to make money.
To put it simply, a real estate wholesaler is someone who buys and takes control of properties that have a great deal of equity on them, and then sells those properties to investors for a profit. Think of it like a wholesale store that sells its products to other retailers, or to consumers looking for a deal. A real estate wholesaler works on the same principle. They buy a large number of houses and then sell those houses to people looking to buy a house so they can flip it, rent it, invest in it, or to simply own it.
There are two main ways that a real estate wholesaler will buy a property. First, they can purchase the property completely for a low price. Second, they can purchase an option on the property to buy the property at a specific price by a certain date. This is often used in stock investing to have the right to buy a stock without worrying about losing everything if the stock does not do what the investor wants. With a real estate wholesaler, if they believe that the home will increase in value, they can buy the option on the home. Then, if the home does increase in value, they can exercise their option, buy the home and sell it. However, if the home does not increase in value, then the wholesaler will let their option expire. All they lose is the small price of the option, rather than everything they paid for the home.
A wholesaler wants properties that are listed at below market value. These are often homes that have gone through foreclosure, are being sold through the bank or are a tax sale. Landlords sometimes want to get out of an investment and will sell for less. In addition, real estate wholesalers will often get homes through estate sales or through out-of-area owners who have inherited a property that they do not want. In order to sell these properties, they will contact house flippers who will fix up the home, or the wholesaler will have their own contractor do it. If the home is in good condition and in no need of repair, then the wholesaler will simply sell directly to an investor.
If you are thinking of becoming a real estate wholesaler, then you should start networking with investors and other wholesalers. A good way to do this is to join a real estate investment group in your area. When you have a good list of house flippers and investors, you can begin buying homes at wholesale and selling them for a profit. All you have to do is hold onto the home until you sell it. You don’t have to work on it; you don’t have to live in it. For many, it is the perfect investment opportunity.