Wholesale real estate offers a great opportunity for people looking to invest in real estate without much capital to start with. Wholesalers act as middlemen in a real estate deal between the sellers and buyers. They get a contract from the seller, advertise the property to an interested investor and then sign the deal over to them for more money than the house selling price. Then they pocket the difference. However, with any form of investing, there are pros and cons. So, in this article, we’ll take a look at the pros and cons of wholesale real estate.
Pros of Wholesale Real Estate
Quick Entry and Results
Once you have educated yourself about wholesale real estate for beginners, such as how to do wholesale real estate and do your due diligence, this investment strategy can be highly rewarding. You don’t need a degree, license, or know-how to repair and sell properties. Plus, you require very little experience and expenses in comparison to traditional real estate investment strategies. You can easily close the deal and get paid within a few weeks.
Require Little Cash And No Credit
Even if you only have little cash or a bad credit score, wholesale real estate investing can still work for you. Since you are not required to buy a property but simply link the buyer and seller, you don’t have to bother about having enough cash or good credit to have a great beginning in real estate wholesaling.
If you are interested in wholesaling real estate, you’ll quickly be plunged into the real estate industry. If you start out working with successful people in the industry and utilize the right resources, you can learn how to find leads, estimate ARV, do due diligence on a property, build trust with a motivated home seller, build relationships with brokerages, and build a list of investors who can close on a property quickly.
Cons of Wholesale Real Estate
No Regular Income
Wholesaling real estate isn’t easy. It will probably not become your full-time job because once you sell an investment property, after that sales, you stop making money. Unlike rental properties, where you can generate a monthly income that a property investor can rely on, wholesaling does not give you this opportunity.
No Buyer, No Deal, No Money
A property buyer has to purchase the contract from you in order to be compensated. Generally, the property you get under the contract includes a date when you should be able to find a buyer to close the deal. The wholesaler typically gives money to the seller to show confidence and seriousness that you will be able to get the deal done. If you get the property under contract for a high price, buyers may not be willing to make a deal.
There you have it, the pros and cons of wholesale real estate. Looking to learn about how to do wholesale real estate or need more help in getting started with wholesaling real estate investing? One of our aim at Real Estate Disruptors is to help you achieve financial freedom through real estate. Contact us today for more details.