Buying Real Estate Wholesale
Selling real estate wholesale is the practice of finding a great deal, getting that deal under an assignable contract and selling that contract to an investor. This is sometimes called “Flipping” but more commonly called “Wholesaling”. You can make a very good living doing this if you are good at negotiating and spend the time and money in marketing and networking with investors. On most occasions the “wholesaler” needs to get properties 30% or more below market value. This leaves enough room in the deal for the investor you are selling your contract to. Now, some people are opposed to buying from wholesalers as they feel if there is a middle man in the deal already, it is no longer a deal. This is very narrow thinking and is simply untrue. When I started investing in real estate, some of my best cash flow deals I bought were from either wholesalers or investors that would do a double close. When you are investing, it is paramount to check your ego at the door and stick to your numbers. If there is 1 other investor or 20 other investors in between you and the original seller, all that should matter is that it is still a deal for you.
I was selling a 10 unit motel two weeks ago and my phone was ringing off the hook. I called a gentleman back and once he heard that I was selling my contract he said, “I don’t buy from flippers”. I thanked him for his time and wished him luck. You see, I stay busy enough with people that want my product that I just don’t have enough time to educate everyone. Choosing to buy real estate should only depend on the numbers and if it fits your criteria. Here in Southwest Florida, we are in a buyers market. Like the great Robert Kiyosaki said, “Investors make their money in a down market”. I could not agree more. The actual investors that buy in Southwest Florida are buying like crazy right now, while the speculators and non-educated investors are scared and trying to sell their properties for retail. In a transitioning market you need to be buying, or, if you are selling, you need to be selling at a good discount. Most of the properties I get under contract do not last for more than a week, last week I sold a 3/1 fixer upper for $46,000 in under 3 minutes! Now, when something sells that fast, you KNOW you have it priced right!
Happy Investing
Ray Higdon
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