What Is A Wholesale Real Estate Deal

What Is A Wholesale Real Estate Deal

What Is a Wholesale Real Estate Deal Really All About?

The question on the minds of many beginning real estate investors is, what is a wholesale real estate deal, and why would it be important? While wholesale real estate deals are not necessarily as profitable as renting out your own building, it can still give you an excellent income. If you play your cards right, your wholesale real estate deals can lead you to prosperity without any money down and without a lot of effort.

What Is a Wholesale Real Estate Offer?

So what is a wholesale real estate deal, anyway? If you look for wholesale real estate offers online, you’ll find established real estate websites listing distressed properties for sale. These properties, depending on the area in which they are located, will usually require an investment much lower than the normal market value. As a wholesaler, you can profit from these offers by getting in touch with the seller, and talking them into selling you their home. As you lock the contract, it will be easy to then buy the property yourself, or market it to an investor. If you can get a better price than the one the seller sold it to you for, then you have a good profit out of wholesale real estate.

The Buyer Is Always Part of the Real Estate Deal

Even when you lock the contract and don’t use simultaneous real estate closings, the buyer is still very much part of the deal. After all, what is a wholesale real estate deal worth without your main source of income? The buyer will ultimately establish your profit, so it’s not enough to get a real estate property in fairly good shape, that will sell for only $30k-$50k. You also have to find an investor who will be willing to come up with an amount – usually in cash – that exceeds the seller’s price by at least $5000. Any lower than that, and the profits might not even be worth the effort you put into marketing and managing the deal.

Finding a Deal That Benefits All

Ultimately, the answer to the question “what is a wholesale real estate deal” has to do with the specifics of the property itself. As long as you have a buyer list, and you’re familiar with the types of properties that your investors are looking for, you already have an advantage. You will know precisely what to search for, and you may even pass on offers that seem very good at first glance. However, knowing that one of the investors you know would gladly pay more than $100,000 for a certain property will allow you to give the buyer more freedom. That way, even if you “buy” the house for more than $80k, you’ll still have an exceptional profit on your hands.

The Importance of Simultaneous Real Estate Closings

Even though getting a title company that supports simultaneous closings is not cheap, it will help you in the long run. Simultaneous closings allow you complete freedom over the way you manage the deal. Let’s say a seller wants $70,000. You can talk to the buyer and agree on a price of $80,000, but at the same time continue negotiating with the seller for a better deal. When you close, neither party will know exactly how much the other one settled for. When it comes to the question of “what is a wholesale real estate deal that’s worth the effort,” a deal involving simultaneous closings is the best answer.