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Real Estate Investing Strategy: Make Money With Wholesaling by Charles Petty, J.D., MBA Your exit strategy is an extremely important part of your real estate investing business. In fact, it is one of the most important parts. Sometimes investors get excited because they learn how to buy properties, they find them and they get the money lined up to purchase them. But after the purchase, the excitement dies, as they have no idea what to do with their newly owned properties. You must know your exit strategy when you buy. What do you plan to do with the property? Knowing this allows you to make all types of decisions, from how much to offer, to what kind of financing to use, and more. One strategy is to incorporate wholesaling into your real estate business plans. What is Wholesaling?
It is simply finding a bargain property and passing it on to a bargain hunter. That bargain hunter will be an investor who will either purchase the property to resell it or purchase it to hold it for rental income. Your profit as a wholesaler should be between $5000 and $15,000 on each house. In some cases it will be higher than $15,000 and on some deals your profit may be a little lower than $5,000. Why wholesale? Real estate investors choose to wholesale properties for a few reasons. They could be:
An important fact to remember! Probably the most important thing that you need to remember when you decide to wholesale is: your buyer should get the majority of the profit! This is important because your buyer will be the one to purchase and rehab the property. There has to be enough room in the deal for your buyer to do this and still retain a nice amount of money for cash out and/or equity. This does not mean that you find properties and give them away for $1,000. Your profit will vary depending on the house, but the better you are at locating properties and putting together offers, the greater your profit will be - while still maintaining an excellent profit for your buyer. About the Author: Charles Petty, J.D., MBA , and his wife have been involved in over 600 real estate transactions in the last 7 years and are the creators of the Ultimate Turn Key Real Estate Investing Systems.™ |
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