Wholesaling Real Estate | Pros And Cons

Hello and welcome to H&M Realty Group's channel. In today's video, we're going to go over exactly what wholesaling real estate is.

Coming right up.

What if I told you you could get started in real estate without a down payment, collecting rents, or even getting your real estate license? Wholesaling real estate is a I'm going to discuss the pros and cons of wholesaling, so make sure that you stick around all the way to the end and I'll provide you all the details.

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I have over 40 years of real estate experience as a broker, a mentor, and an investor. This channel is dedicated to helping the new and experienced real estate investors of any age create the life that they've always wanted through real estate investing.

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Real estate wholesaling is the process through which an individual, the wholesaler, acquires a contract from the seller of the property and assigns that same contract to an end buyer. Wholesaling is considered one of the best short-term investment strategies, and it's a great way for individuals to break into the real estate industry. You have the ability to contact sellers directly by phone, by mail, or other sources, and it's a great way to learn verbal skills and negotiating tactics. Okay, a wholesaler is able to make a profit by identifying properties, putting those properties under contract with the seller, and then negotiating the sale of that property to an end buyer like a flipper. Wholesalers usually typically earn their wholesale fee by adding an additional amount on the contract before they sell it to the end user. End buyers, or flippers if you want to call them, usually want to get properties identified by other wholesalers or rehabbers in that they spend most of their time actually rehabbing the property and they would prefer somebody else to actually go out and find these properties and put them under contract. By acting as a middleman, the wholesaler can generate income and give a value add to that end user. Sounds simple enough, right? Does this sound like something you can do?

Comment, yes, Joe, down below.

However, there are some things that you need to keep in mind to make wholesaling work. So you need to keep watching.

Okay, let me explain to you the process. Okay, it's a pretty simple process. You got the seller, you got the wholesaler behind me, and then you have the flipper on the end. So the first thing you need to do is contact the seller and then negotiate an agreement with him, okay, him or her. And so then we come down to this contract. Once the seller has agreed to a price, Then the wholesaler will turn around and contact the flipper and offer the flipper the property at a slightly inflated value from where he has a contract called the wholesale fee. Let's talk about some pros and cons about wholesaling. You got 3 pros over here: earning profits, learning real estate, limited funds. Okay. Earning profits. I have people ask me, well, you know, how long is it going to take before I earn something? Honestly, it could take one call for somebody and the seller says yes. It could take 1,000 calls before you get there. But you have the potential to earn some profits simply by calling people. Learning real estate. Great way to learn real estate. Get the overview of exactly what it is that you're doing. You're basically asking somebody to sell their home at a particular price. Number 3, limited funds. So the funds that you're going to put into a wholesale is basically where you find your leads, skip tracing leads, and that's usually, you know, less than $400 or $500 to do that. And then the rest of the time is your effort to go out there and actually make those calls. Okay, let's talk about cons because there's always cons to everything. Unpredictable income. So it's not like you're, you know, going to make that first call and get that first deal that day and then expect to do the same thing every single day. So it's unpredictable. Number 2, limited leads. In that the leads that you're searching for are, you know, pretty much being searched by every other wholesaler that's out there. And not to discourage you, and I have people ask me the same questions, well, if I'm calling on the same leads, then what makes you think that I'm going to be successful? And it really, it just depends on the time of the day, what's happening in the person's life, is it the right time to give them a call? Are they ready to listen to what you have to say? If all those fall in line, then great, then you have the ability. And then the last one, it's really kind of the big one that I want to kind of warn everybody about. Rejection is one of those cons that you need to be careful with because you will have rejection on the phone. You'll have a lot of nos before you get to that yes. I always like to tell people, try to get a little bit informative and personal. with them. If they start talking about their kids, you know, how many kids do you have? You have to build a rapport. But yes, be careful with the rejections, and they could be— if you're the type of person that takes rejection negatively, then this is probably not something that you want to dive into.

Wholesaling real estate presents itself as an excellent opportunity for real estate investors to get actively involved in real estate, as it requires little or no capital and a great way to learn the ropes. If you are driven, disciplined, and organized, there is no limit on how much money you can make in wholesaling. Ready to get started in your real estate career and build your financial future? Please make sure to subscribe or contact me anytime. I'm here to help.