real-estate-wholesaling-pros-and-cons

Real estate investing is a great industry to base one’s career in. Problem is, if you are interested in making money out of selling properties, you sort of need to be loaded on the financial aspect of things.

Or do you?

Actually, this is one of the biggest hurdles that gets in the way of many interested real estate investors because apparently, even an arrangement such as real estate flipping requires you to have some immediate resources at hand to avoid frustration. Well, you can navigate your way through without bloated financial coffers, but the reality is it tends to be too much of a leap for many investors.

Until real estate wholesaling.

This is a form of investing that provides a great opportunity to earn some income, with a few deals capable of providing an immediate cash injection without having to source for credit. It partly explains why many prospective investors kickstart their real estate careers as wholesalers.

As with flipping, the whole idea of real estate wholesaling is to find properties at a bargain (usually below market value), or being able to haggle a lower price with the seller – minus the license and many of those other barriers for entry.

Like every other business though, it has its upsides and downsides, and it’s nice to get both sides of the story before you make the plunge.

But hey, it’s why we’re here! This first part of our two-part mini-series seeks to shed a light on the positive aspects of dipping your foot in real estate wholesaling.

The Upsides of Real Estate Wholesaling

Following are the pros of real estate wholesaling, especially for industry beginners and anyone else strapped for cash for that matter.

Make Money in Less Time

Wholesaling can be a very lucrative business, no questions about it. But only if you have educated yourself on all it entails and done your due diligence. It’s a very kind form of investing for new investors because it doesn’t require much finances on your part, or experience.

If you manage to unearth a respectable deal, chances are the seller is desperate to get rid of the property, so don’t be afraid to quote a fairly low price. And in case your offer is accepted, then it’s possible to close the deal and have the check in your account within as little as 45 days.

Just remember that in real estate wholesaling, you are the middleman between the seller and investor and so you have to buy low and sell low. The profits are thin, sure, but there are no risks on your part, let alone any outlay required.

Orient yourself with the Market Quickly

Another upside that comes with wholesaling is that it allows new and interested entrants into the real estate market to dive into the deep end of the industry and learn the ropes in just a short period of time.

With the right education and guidance, you will learn the nuts and bolts of negotiating, marketing, organizing and acquiring the legal documents needed in the business.

Actually, you could say a single real estate deal comprises many of the aspects involved in other real estate transactions. A few wholesale deals can put you in good stead with regard to knowing what to look for in deals and what to steer clear of.

No Cash Required and No Credit Involved

Many people interested in investing in real estate often cite limited access to capital and a low credit score as some of their main deterrents from failing to do so. With real estate wholesaling, this will be a thing of the past.

Wholesaling gives you a chance to become a player in the real estate sector even with bad credit because you are not the person purchasing the home, and thus don’t have to undergo a credit check.

Additionally, when putting a property under contract, you can put as little as $10 and this should be double-kill for you – not only is the capital you need for an investment chickenfeed, but also this involves little personal risk on your part in the event the deal falls through.

Stay tuned for Part 2 of our mini-series which will highlight the downsides of real estate wholesaling to ensure you know what you are really getting into!