Wholesaling is an effective short term strategy that can be used to create quick profits. It involves finding a property that is below market value, gaining control of the property through a purchase and sale agreement, and then finding a buyer and assigning the contract or selling them the property shortly after close. Below are three wholesaling tips:
Be very specific on target properties. If you know what you are looking for in terms of; type of property, price range, location, and building condition you will have a better chance of finding it. Being a specialist you can also move quickly and confidently when a property becomes available.
Build a database of motivated buyers in advance. Get a good sense of the type of properties your buyers are looking for, to help better define your target properties. Once you put a property under contract you have very limited time to find a buyer, therefore you’ll need to do this ahead of time. When you find a target property all that is needed is to announce it to your contacts.
Build a database of motivated buyers. Some properties will be listed by realtors, but there will also be properties that are FSBO (For Sale by Owner) or not listed at all because the homeowner doesn’t believe they’re house can be sold. For optimal results you’ll need to look beyond a Realtor and some marketing will be required. A good book for beginners is ‘Getting Started in Real Estate Day Trading’ by Larry Goins.
Lastly, you should consult with your Realtor and or lawyer to ensure that your contract has the proper contingencies in the event you can’t find a buyer. Reducing the amount of your deposit also helps to mitigate risk.