The Truth About Wholesaling Real Estate: Does It Still Work in 2023?

There has been a lot of talk whether wholesaling real estate is still a viable business strategy going into 2023. I'm seeing all kinds of different reasons people are talking about of why this strategy won't work. Some people are saying that the market is too saturated. Others are saying that the rising interest rates are going to kill any profit that wholesalers may be able to make. I'm also seeing people that are worried about future regulation that might destroy the wholesaling industry. I'm going to do a deep dive into every single one of these reasons and figure out whether wholesaling real estate is still going to be viable moving into the next year. The first reason why people say that wholesaling real estate might not be viable in 2023 is the market's too saturated. The thing about wholesaling is it has a very low barrier to entry. There's so much information out there on how you can get started wholesaling real estate today with no money, no real estate license, and no experience. Anybody can jump into this industry and they can make a ton of money without having to have any kind of credentials or experience. It's The good, because anybody can go in and they can make life-changing money just as I have. The bad thing is that people are saying that it's making the market become too saturated. All that means is that people are making a lot of money. For me and my wholesaling business, I remember people used to say, oh, you can't wholesale in California or Arizona or Nevada, Las Vegas, because they were too saturated. I started marketing in only these saturated markets, and we started making so much more money. Whenever somebody says that something's too saturated, I immediately get wary and start to think, well, why is it saturated? The answer is probably because people are making a bunch of money doing it. It's practical business advice that if nobody is searching for something, then it might not be a good business to start. But if tons of people are, then there's a legitimate need there, and there's some demand that you can fill. My conclusion is that there's no shot the industry is too saturated. There are over 80 million single-family residential homes in the United States, and that's not even counting all of the vacant land, all of the apartment buildings, all of the strip malls, and so on. You can wholesale every single different kind of real estate, and I don't think there's any way that all the demand would be matched. Moving into 2023, a lot of experts are predicting that we're gonna have a bad recession. If we have a bad recession, that means there's going to be more homes in pre-foreclosure, and if there's more homes in pre-foreclosure, there's gonna be more people who need the help of wholesalers to get out of their houses quick so that they can move on and not have their property foreclosed on. Now, I absolutely do not hope that happens, but if it does, I hope that there are people out there who are able to be helped by companies like my own. Another reason why people say that wholesaling might not work in 2023 is the rising interest rates. Now, even though rising interest rates don't directly impact wholesalers because we are only dealing with cash sales, we are not dealing with people who are buying real estate using conventional loans. We are locking up properties using contracts for cash. Now the thing is, we have to assign these contracts to somebody else who's gonna go the head and, and then flip the property. Then they're gonna list the house on the market, will eventually be purchased by somebody who is buying a house using a conventional loan. Those people are gonna be affected by the rising interest rates. And here's how this works. If the end buyer who is gonna be purchasing these properties to live in can no longer pay as much for houses because of the rising interest rates, then we are not going to be able to sell the houses to flippers for as much money, meaning we have to offer our sellers less. Back in 2020, 2021, when there were about 3% interest rates, somebody that could afford a $2,000 a month mortgage could afford a house that was around $475,000. That same person who can still afford a $2,000 a month payment but has a 6% interest rate will only be able to buy a house that worth around $330,000. That is almost a difference of $150,000. So when our end buyer is unable to pay as much for houses, that means that our flipper is not going to be able to pay as much for houses because they're not going to have as much spread. And when our flipper can't pay as much money for houses, we can't pay as much money for houses. The good thing about wholesaling is that it works in any market, whether it's going up or down. When it's going down, wholesalers just need to offer less for houses, incorporate more spread so that flippers are going to be able to have money to spend on the house to make it better, still be able to sell it for a profit, but be able to sell it for a price that the end buyer can actually afford. When the market's booming and prices are going up and interest rates are low, wholesalers can afford to pay more for the property because flippers know that they were going to experience appreciation on the property as they're doing the flip. Plus their end buyers will be having more buying power because of the lower interest rates. The arbitrage is always gonna be there for wholesalers. We just need to know whether our offers can go up or down depending on the market. Even though rising interest rates definitely affect the real estate market, it's not going to destroy wholesaling because wholesaling works in any market, whether it's going up or down. Another reason why I'm seeing some people say that wholesaling is gonna be dead in 2023 is because of regulation. Throughout the years, there's been all kinds of different regulations imposed on wholesalers. Everything from the FCC making it more difficult for wholesalers to send text messages or cold call homeowners to governments actually making legitimate regulation about having to disclose you're a wholesaler. In the past, we've always found a way to mitigate these changes. For instance, even if they completely banned cold calling and texting, we would just be able to find other ways to find motivated homeowners, like using Google pay-per-click Facebook ads, YouTube ads, TikTok ads, etc. Now, last year there was actually a law passed in Arizona, my home state, that said the wholesalers have to disclose to their sellers that they are wholesale buyers. This didn't affect us because we've always been transparent to our sellers and let them know that we're going to be working with other financial partners in order to get the deal closed. I had no problem putting in our purchase contracts that we were a wholesale buyer. Like I said, we've always been transparent and let people know exactly what we're doing. If anything, this is a good thing because it's going to get rid of the rotten eggs who are trying to take advantage of people and misguide people about what their true intentions are with the property. Now, I'm never a fan of any sort of regulation. I think the government has no business telling people what they can or can't do. However, I am perfectly prepared to pivot and deal with any sort of new regulation that may come across. The thing is, we will always be able to find a different way. Even if the government said assigning contracts is completely illegal, we would still be able to do things like double close. It's impossible to get rid of wholesaling unless you get rid of trading real estate completely. And if that happens, we're all screwed. In conclusion, wholesaling real estate is definitely going to be alive and well in 2023. In fact, I'm predicting that 2023 is going to be the biggest year for my wholesaling company. I'm not worried about it being oversaturated. When people say that things are oversaturated, it's just because a lot of people are making money. Like I said, there are over 80 million single-family homes in the United States. There are more than enough deals to go around. Rising interest rates don't affect wholesalers because wholesaling innately is an arbitrage business. Whether prices go up or down affect wholesalers in the way that we need to adjust our offers up or down, but the arbitrage always remains the same. As long as we can adjust our prices, we'll still be able to provide great deals to flippers. Finally, regulation isn't going to kill wholesaling because we will always find a solution to the problem. Make wholesaling illegal? No problem. No problem. We'll just double close our deals. Make it impossible to cold call? No problem. We'll only rely on inbound ads. We can always figure out a different way to pivot and make sure that we're able to get in front of motivated sellers who need our help. One way I know for sure that wholesaling is not dead in 2023 is that my team has already locked up 7 deals in the first week of 2023. We are making things happen. And if you wanna learn the exact strategies that we're using to get deals and my exact plan for truly taking off in 2023, you might want to consider attending the Titanium Crucible. This is a 2-day event that me and RJ Bates hold where we show you guys all of the systems we use in our wholesaling business, the processes we built behind them. It's really a step-by-step guide on how to build a virtual nationwide wholesaling business. If you want to learn more, there's a link in the description that says attending the Titanium Crucible. For anyone that's looking to get started wholesaling real estate, Also in the description, I have a ton of free resources that you can take advantage of so you can start getting deals today. Now you know that wholesaling real estate is going to be alive and well and it's not going to only survive 2023 but will thrive in 2023. You need to get started today. [MUSIC] [MUSIC]