How to Wholesale a House

Learning to wholesale houses is a great way to start out in the business of real estate investment and house flipping. Wholesalers usually find good properties and buy them at cheap prices – then, they resell these properties to investors. These investors are generally house flippers, who proceed to renovate the houses and then sell them for profit. The best part of wholesaling is that there is little to no need to spend any money up-front. The interested investor takes care of most of the payment, and the wholesaler (who is basically responsible for finding good houses at low prices to cater to investors) gets a payment, much like a finder’s fee. While most individuals interested in real estate investment will gradually want to progress to full-fledged house flipping, wholesaling a house is a good way to get into the business, if you know how to go about it.

• The first thing you need to do is establish yourself as a wholesaler – put the word out regarding your services, and get in touch with people who are interested in both buying and selling. Make sure you print out business cards or provide contact information, so people know where to find you – you can also advertize on social networking sites, and create a website if you wish. Networking is key – connect with all the right individuals and build up a list of contacts.
• Put in an extra effort to find leads, and go out in search of good deals that no one else can find – this will make you invaluable and earn you countless loyal customers. Browse through MLS listings on a regular basis, so you can quickly pick up a lead on any new houses that have been listed recently. In addition, you can also go hunting for houses yourself – attend foreclosure auctions for good bargains, and drive through neighborhoods to look for houses that haven’t been listed yet.
• Make sure you only buy properties that you know the investor will want to purchase – think of it in terms of an investment, and nothing more. It is important to note the condition of the house – the investor will be remodeling the property, and will be looking for homes that are cheap and require little to no repairs. As a wholesaler, it is your job to cater to these needs of the investors. Do not invest in run down houses that are structurally unsound, and pay close attention to the kitchens and bathrooms in a house – these cost the most when it comes to renovating, so you should look for houses that have their kitchens and bathrooms intact.
• Do the right calculations. Keep in mind that the house should be such that both you and the investor earn a good profit. Write down the After Repair Value (ARV), and subtract your wholesaler’s fee and the repair costs from this – the resulting number should give you an idea about whether the investor will profit, and whether s/he will be interested in buying the house from you.
• Make sure you go about the process of finding investors in an organized and methodical fashion – it is best to gradually build up a base of loyal customers for the long run. Draft a list of interested buyers who avail your services regularly, and keep adding to this list with the passage of time as you continue to advertize. Keep sending regular emails to all your buyers (use the buyers list as a mailing list), informing them every time you find a new property, so anyone who is interested can contact you immediately.
• Finally, make sure you choose the right offer from interested investors. Remember that your goal should be to sell properties quickly – do not keep them on your hands for too long, as this can lead to added expense. Do not sit around waiting for an offer that will earn you a huge profit – it is best to sell for a modest profit than leave a property hanging for too long. In addition, you should also always prefer cash offers to high finance offers.