What is real estate wholesaling?
Real estate wholesaling is the process of finding potential offers, analyzing them, negotiating them, monitoring them, selling them, and charging a fee to do this work.
Let’s go through those steps so you can understand a general overview of what is happening at each step.
First, you must find possible offers. Typically with real estate wholesaling, you don’t find these deals in the MLS with a real estate agent. It’s not that a real estate agent can’t help you find great deals or that there aren’t great deals in the MLS, the reason we don’t normally find deals in the MLS to wholesale is because it’s unconventional and difficult to do. to get. control a property that is listed in the MLS with the intention of assigning your contract to another buyer before closing. Can be done? Yes. But you are fighting an uphill battle trying to do it that way.
It is much better to try to find motivated sellers before they list your property for sale with a real estate agent or broker if you intend to wholesale it.
The second step is to analyze the offers. You need to know what your end buyer will want as an offer and analyze your wholesale offers accordingly. If your buyers want to buy stocks, analyze them based on stocks. If your buyers want to buy based on cash flow, look at it based on cash flow. Tailor your criteria to what the buyer list wants.
The third step is to negotiate agreements. Once you find and analyze a property, you now need to negotiate with the seller to get the property at the price, terms and conditions you want and be able to wholesale it profitably.
The fourth step is to control the deal. Once you have agreed on the price, terms and conditions, you must get your agreement in writing with a purchase contract or an option. Most of the time it is not enough to have a verbal agreement; you will want to get your right to purchase in writing.
The fifth step is to sell the deal. Hopefully, you’ve been building your buyer list ahead of time and can message your investor buyer list to sell your offering quickly for a wholesale fee. Otherwise, you have to market like crazy to sell your offering in the time you have.
And the final step is to collect your fees. Once you’ve sold the offer, you’ll want to collect your fee for the wholesaling of the property and this is usually, but not always, done at closing.
Repeat as needed to generate cash from wholesaling properties.
