There are a number of ways for a person to invest in the real estate market. However, if you prefer to invest in this market with no credit, no money, or no financial risk, then you must go with wholesaling of real estate properties. A lot of real estate investors have found success in this particular venture. However, if you are still starting in real estate investing, you might find wholesaling challenging.
Nonetheless, the idea of investing in real estate with no barriers makes real estate wholesaling a very enticing investment option. As long as you can take advantage of the good side of wholesaling, there is no doubt that you can attain some success. This can be said since wholesaling is really all about being wise in finding deals. If you can hone your skills in finding good deals, your profit potential will surely be unlimited.
After finding a good deal, you proceed in selling the real estate property to make some profit. Here are some ideas on how you can structure your wholesale properties like the pros.
Contract assignment: Though this is the easiest among the other options, you need to understand that this also carries some risk if the method is not done right. This method is also restrictive since bank owned properties are off limits for this particular wholesaling method. Even so, this is a good method of wholesaling when you are the one that directly deals the seller.
Basically, you start by getting a house that is under contract and then have your rights assigned in the contract to another buyer for a particular fee. This new buyer will be getting the responsibilities and rights stipulated in the contract and will be closing the deal in your place. It is always the better option to be getting your fee upfront; however, the most common practice for this method is only getting your fee after the buyer has bought the house. When assigning contracts, make sure to take into account the certain things.
To being, you must always disclose to your seller that you are assigning the agreement to another buyer for a particular fee. It will be better to put this into writing in the form of a contract. Sellers will not have any problems with this set-up as long as you are being transparent that you are the type of investor who buys houses for money before you go about doing some negotiations.
Double close: For this particular wholesaling method, you will be buying the house and then be reselling it. There are a number of ways that this can be done but the most common way is to buy and sell a house on the same day. Generally, you have to get some financing help so that you can better close deals with any seller.
This method is unfortunately the most expensive since you will be paying for two sets of closing costs. Nonetheless, a lot of real estate investors prefer this method since they are not required to disclose to the seller their intentions of reselling the house. The investor has every right to keep the deals with the seller and those with the buyer private. This is a wholesaling method that allows better protection of profit. Of course, the information will then become public knowledge; however, this can only be done after the contract or deal is closed.