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Why Choose Wholesale Real Estate Investment?

The real estate business is no different with any other business when it comes to selling. Wholesale real estate investing is also one way of paving your way to future financial success and security. You purchase in bulk for a cheaper price and sell it in retail for a profit. There are many opportunities in wholesale real estate which other people are not aware of.
What is a wholesale real estate investor?
A wholesale real estate investor don’t need have a lot of cash on hand or even worry about credit. The strategy is to find a property and put it under contract, then transfer the contract to a retail buyer – assuming of course that there is already an available retail buyer. Home building is not necessary for the wholesaler since all he is doing is just to facilitate paperwork. He can have as many deals as he can, not considering how much money he starts out with.
Marking up your wholesale property
The only thing you do is to transfer property ownership. You do not need to rehabilitate the property – meaning, you are not going to acquire the property, fix the plumbing and wiring, paint the walls and plant the area. You do not have the same burden as that of the retail investor. The only investment you have is time – which could only be in a matter of days. This means you can sell the property on a lower margin, leaving some amount of profit for the rehabbing investor you’re going to sell to.
How do you close on a wholesale investment?
There are a number of choices on closing a wholesale real estate deal. Here are some of the options:
Option #1: Assignment. Assign the contract to your buyer and they close the deal. This is a viable alternative choice since you give up control, cash in money and let them do the work.
Option #2: Close on the contract. This requires your ability to close, meaning you invest some money – and later close with your potential buyer. But, if you don’t have available financial resources to close, maybe you will need “hard money”. Timing for a resale is also essential in this option.
Option #3: Double closing. This means you close the buying and close the sale at the same time. You close with the Seller and then with the Buyer, or you could reverse the process. Two closing statements and two deeds. The Seller deeds the property straight to the Buyer, thus you stay out completely on the chain of title. You can have both parties do this at the same time and place, so everybody knows how much money you’re making – or you could do this separately for both parties by time or place.
However you close in on the deal, it is important to leave a profitable margin for your retail buyer. This is a buy low – sell low market. Avoid getting greedy.
Knowledge, patience, good eye for potential properties and a good number of contacts are your key ingredients for wholesale real estate investing. Learning the trade and doing well in the trade of real estate investing takes a lot of years of getting used to, but once you have established your identity, wholesale investment is one of the greatest opportunities there is.

To learn more about our financing solutions for residential and commercial properties, please call us at (310) 734-4044 or visit us at www.magnaloans.com

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