Understanding Basic Real Estate Concepts: What Does Wholesale Mean in Real Estate?
What does wholesale mean in real estate, and why should it interest you? In most cases, wholesaling can be one of the most ideal methods to launch oneself on the real estate scene. Since it doesn’t necessarily require any capital, and it can bring in a steady profit as long as the investor plays their cards right, wholesale real estate can be of great benefit, especially in an area where low cost real estate properties are abundant.
What Does Wholesale Real Estate Mean?
So what does wholesale mean in real estate anyway? The concept is simple. As in the case of companies that buy large quantities of products at a wholesale price, some real estate investors can do the same with real estate properties. By aiming to purchase broken down properties that require renovation work, real estate investors can aim to buy those properties at a lower cost. They can then find a buyer or an investor willing to purchase the home at a much higher cost once repairs are completed, or even without investing any money into the repair or renovation work.
The Traditional Wholesaling Method
A common question that real estate newbies might ask is, what does wholesale mean in real estate, and what types of real estate wholesaling methods should I start with? The so-called traditional method is one of the most significant and popular methods that most beginning investors will consider. This technique involves using capital to purchase and sell large numbers of wholesale properties in a short amount of time (usually 6-10 properties per month). Although this is the most profitable method by far, it also requires a great amount of capital to start with. Most times it will be difficult to begin with anything below $10k or $15k, to have the money to close the deal on at least one real estate property in the beginning.
What Are Assignments in Wholesaling?
When considering the question, what does wholesale mean in real estate, many beginning investors have the wrong idea. However, those who know about the assignment method will be able to grasp the full benefit that real estate wholesaling can bring. The method involves finding motivated sellers who are willing to sell the property at a low cost, then turning around and finding a motivated buyer, who would be willing to close the deal as quickly as possible. The idea is to do so fast enough that the deal with the original owner will never be closed with you, so you can just use the buyer’s money to pay for the property, instead of using your own.
The Ultimate Purpose of Real Estate Wholesaling
The purpose in wholesale real estate is to purchase and sell real estate without using your own money. This is the ultimate plan that most aspiring real estate investors, who don’t have a lot of capital to begin with, will aim for. The plan can be quite ambitious, but also lucrative. With the appropriate amount of research and a lot of ambition, the question “what does wholesale mean in real estate” can be answered more swiftly than ever, and with a high enough short term profit to back up that answer.