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How to Wholesale the house and make over $20,000
How to Wholesale the house and make over $20,000?
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Wholesale in real estate is when you get a property under contract and then assign that contract to an end buyer. The end-homebuyer is usually a real estate investor, for a fee. This can be done right and make more than $20,000 per deal.
Here’s how: Find a motivated seller.
Distressed properties are physically distressed (needing repairs) or financially distressed (the owner needs to sell quickly because of financial problems). They’re often sold below market value.
Marketing strategies: Use direct mail, online ads, bandit signs, or “driving for dollars” (driving around neighborhoods looking for potential deals).
Negotiate a low purchase price: Buying low is the key to making huge profits. Aim for 60%- 70% of ARV minus repairs.
Get the property under contract.
Use wholesaling contracts: Draft contracts that allow you to assign your interest in the property to another buyer. Ensure there’s an assignment clause and a “weasel clause” or “escape clause” that lets you back out if you can’t find a buyer.
Set the assignment fee: Decide on this upfront. It should be factored into the price you negotiate. For example, if you want to make $20k, work backward. Figure out what an investor would pay, and subtract your contract price from the seller. Whatever is left over goes towards covering your assignment fee amount.
Find an end buyer
Build a buyers’ list: Network at real estate investment groups, connect with cash buyers, and use Facebook groups, Craigslist, or other online platforms.
Market property: Present details about the property. Details include the purchase price, repair estimates, ARV, and emphasized profit potential after repairs have been made while talking directly to the end-buyer contract. Once someone expresses interest in paying your desired fee, tell them they must agree to take over where the contract left off, thus becoming a new buyer under said terms.
Close the deal
Work with the title company: Choose a company specializing in wholesaling deals. They will handle the closing process, which includes ensuring the title is clear and transferring property from seller(s) to end-buyer(s).
Collect assignment fee: At closing, the end-buyer pays the agreed-upon purchase price, and you get paid your assignment fee. If all goes well during negotiating, this can easily exceed $20k.
Repeat the process
Scale business: After one successful wholesale deal, keep finding more motivated sellers and growing the buyers’ list. As you gain experience, you should start doing multiple deals simultaneously, increasing potential income levels.
Tips for success:
Due diligence: Always research the property thoroughly, including repair costs, market value, and the motivation level of the seller(s).
Negotiate effectively: The greater your ability to negotiate down the purchase price, the better your chance of having a higher profit margin available later on down the line. However, push only a little hard; otherwise, you could scare them away altogether, causing no sale to happen at all.
Build relationships: Having strong relationships with buyers, sellers, and other professionals, such as real estate agents or even title companies, is vital to succeeding in the wholesaling industry over the long term.
My last words about wholesaling are that it can be a profitable real estate investment tactic. You can make more than $20,000 in one deal. The trick is to find the right property at the right price and ensure plenty of buyers lined up who can close fast.
If there’s anything else I could help with or if anything needs to be clarified, just let me know!