In the single-family residential market, you have undoubtedly heard of wholesaling. Naturally, this might conjure up thoughts of houses sitting on tall shelves in warehouses. What exactly is wholesale real estate anyways?
What is Wholesale Real Estate?
Wholesaling is a nickname used to describe a type of real estate investing or transaction where the investor buys and sells an interest in the property without holding it.
Assignment Vs. Double Close
Wholesalers typically use a double close or an assignment of the contract to sell the property. The investor buys the double property close and immediately sells it to the end buyer. Frequently the title company waits until everything is signed and funded to execute both closings.
Skills Required for Wholesaling
Sometimes wholesaling is viewed as an entry-level real estate investing option. That is because it does not take a lot of capital to get into wholesaling. At the minimum level, the only requirement is to get out to potential sellers and get the property under contract.
Marketing Directly to Sellers
When marketing directly to sellers as a wholesaler, you have many different options on how to get in contact with a seller. Some wholesalers focus on one or two channels, and others embrace a multichannel marketing strategy.
There are two main aspects to work on to get wholesaling at a high level. The first aspect is to get the deal flow going. You can do this by starting a marketing campaign for potential home sellers. The second aspect is to build a buyers list.
How to Find Wholesalers in Your Market
If you are not looking to become a wholesaler but realize that wholesalers could be a good source of deals for real estate investing, finding wholesalers is essentially the same process as finding buyers as a wholesaler. You can go to local meetups and REIA meetings. You can also find the local groups on social media and get involved.