Wholesaling for Quick Cash
Wholesaling for quick cash is a form of house flipping that requires little time and effort on the part of the seller. Most people think of house flipping as the act of purchasing distressed properties, such as foreclosure or bank owned properties, under market value. Investors then fix the property and resell it for profit.
When engaging in wholesaling for quick cash, investors purchase distressed properties and sell them at a higher price to property rehabbers. Sellers do not make repairs or renovations. Instead, they sell real estate "as-is". In some cases, investors do not even need to own real estate to wholesale it out.
Oftentimes, real estate investors engage in wholesale real estate deals where property owners offer seller carry back financing. They purchase properties from the seller using real estate contracts. These contracts can then be sold to another buyer for profit.
Let's say you find a foreclosed home with an after-repair value of $150,000. The homeowner owes $100,000 on his mortgage note, is $3,000 behind on payments, and requires $12,000 in moving expenses. You offer to purchase the home for $112,000 and agree to pay the mortgage deficiency; making the total purchase price $115,000.
Now, let's say the home requires $10,000 in repairs. You resell the property to a rehabber for $130,000. The rehabber invests $10,000 in repairs and has $10,000 in instant equity. You make a return on investment to the tune of $15,000 and do not have to spend a dime on repairs. Not a bad deal, right?
Perhaps the biggest advantage of wholesaling properties is the fact that nearly anyone can participate. Wholesale transactions generally require little or no money down and credit is not an issue. Since financing is carried by the original owner and the new buyer, wholesaling for quick cash is simply a matter of transferring real estate notes.
In order to get started in real estate wholesaling, experts suggest creating a "We Buy Houses" marketing campaign. By advertising in newspapers, real estate investing forums and local publications, you will be able to locate potential sellers who are in financial distress and need to quickly sell their property.
Next, create a list of potential buyers. These can be other investors, rehabbers, retailers, and individuals interested in buying fixer-upper homes. Contact them to find out what types of properties they are interested in, areas where they want to buy, and how much they are willing to spend.
Finally, seek out realestate properties that match the descriptions which your potential buyers are interested in. Once you locate properties, contact prospective buyers to offer them your deals.
Wholesaling for quick cash is a relatively risk-free and easy way to become involved in real estate investing. Learn more about the variety of investment opportunities and creative financing techniques in our real estate investment article database.