If you’re ready to invest in real estate but don’t know where to start or don’t have the time to research, you may consider buying from a real estate wholesaler. Essentially, a wholesaler does the legwork in finding a home – all you have to do is pay for it.
But how do you find real estate wholesalers? Here are some great tips to get you started.
What is Wholesaling?
A wholesaler finds amazing real estate deals, secures them, and sells them on to another real estate investor for a higher price. Wholesalers typically don’t buy the property, but instead, research and find the best deals, passing them off to investors, making a small profit on the deal for their services.
Wholesalers don’t fix up the property or even take possession of them. They find the property, secure the deal, and pass it along to investors.
Investors or buyers don’t have a ton of time to do research, so you need a reputable wholesaler you can trust. Once the wholesaler puts the house under contract, they need to move it along fast to an investor who will close the deal by the date stated in the contract.
The wholesaler makes money on the difference between the contracted sales price with the seller and the price agreed on with the buyer (investor).
If you don’t have time to find properties yourself and want to find real estate wholesalers, use these simple tips.
What do Real Estate Wholesalers Charge?
Real estate wholesalers typically charge a percentage of the sales price, much like a real estate agent would charge. Some agents also charge a flat fee of around $10,000.
The exact cost varies based on where you are investing, the market and the work the wholesaler puts into each project. It’s best to look around at different investors to see what each charges to find the right fit for you.
How do Real Estate Wholesalers Make Money?
You may wonder how real estate wholesalers make money. If they don’t often take possession of the home and instead transfer the contract to you (the investor) before closing, how do they make money?
In a typical real estate transaction, an investor buys a property, fixes it up, and sells it for a higher price, pocketing the profit. With wholesaling, the middle step is eliminated – wholesalers buy and sell the home within a few short weeks.
But, wholesalers charge a premium for their service. They don’t transfer the contract to the investor (buyer) at the same price they bought it. They increase the price, keeping the difference between what they paid and what they charge you. The premium covers their cost in finding the property and selling it to you.
How To Find Real Estate Wholesalers
You’ll use similar tactics to find real estate wholesalers as you would to find motivated home sellers or homes for sale. Here are a few tried and true tricks:
- Use the internet – The internet offers a wealth of information. Search ‘real estate wholesalers in my area’ to find what you’re looking for. Make sure you do your research and ensure they are legit and have good reviews, which again you can find on the internet.
- Network – Get the word out about your need for real estate wholesalers. Word-of-mouth is another great way to find real estate wholesalers. You never know who your network knows that could set you up with the right real estate relationship.
- Look for wholesalers who market – Wholesalers who spend money on marketing are usually the ‘real deal.’ They aren’t going to waste money on advertising if they are a scam. Look for billboards, paid ads online, and direct mailers.
Other less conventional ways to find real estate wholesalers include – following wholesalers on YouTube, answering a Craigslist ad, or randomly answering calls from wholesalers that make cold calls. You can also search for reverse wholesalers, who can help you find a property that is perfectly matched to you buying specifications.
Reputable Wholesale Real Estate Companies
While you should do your own research when choosing wholesale real estate companies, here are some top-rated real estate companies from around the country:
Tips For Finding Great Real Estate Wholesalers
Real estate wholesalers are in it to make money, obviously, otherwise, why would they be in business, right? Before you choose just any wholesaler, consider these tips:
- Know the fees – Ask about the fees upfront so you know what you’re paying. The last thing you want is for the transaction to cost you more than you realized.
- Ask about the services offered – Every wholesaler operates differently. Ask around and find out what services each offers and compare them to what you want to see if it’s the right service for you.
- Find out if you can see the home – Most wholesale purchases are site unseen. You need a wholesaler you can trust to ensure you’re not getting taken advantage of. Ask what information they share about the property and how you see it (even if it’s just pictures or videos).
- Research the wholesaler’s reputation – Today it’s easy to find out about anyone’s reputation. See what others have to say about a wholesaler you’re considering to make sure he/she has a good reputation.
Final Thoughts
It’s easy to find real estate wholesalers today, but you still need to do your due diligence. Just like you’d research any other business or service, find a wholesaler you can trust. When you invest in real estate, you’re investing a large amount of money so this isn’t something to take lightly. When you find the right wholesaler though, it can be the start of a great gig in investing in real estate.