Another Look at Wholesaling

Let’s just do a quick refresher on wholesaling as a real estate investment niche. There has never been a more perfect period for real estate wholesaling opportunity. After the housing and mortgage crash, there are more renters and fewer homeowners. More people are entering the rental market, and first time home buyers are almost invisible. Some housing market pundits are calling America a rental society for years into the future.
For many investors, being a landlord just isn’t something they want to deal with. However, the major customer for the wholesaler will be the cash investor rental property buyer. If you have any doubts, just take a look at how many thousands of foreclosures have been bought up by big investment groups like Blackstone Group. Heavy hitters are betting on higher rental demand and rising rents.
The real estate wholesaler provides a valuable service to these type buyers. They are always on the lookout for income properties that fit their criteria. They have the cash to buy them, and the wholesaler only needs to meet their needs and deals will happen. The best feature of this investment niche is the fact that you need little or none of your own money to get deals done.
Assignment Contract Strategy
In this strategy, you locate a motivated seller with a property you know you can match with a cash investor in your buyer list. You enter into a contract with them to sell at a value price you know your investor will jump on. However, the buyer box in the contract will have “Your Name and/or Assigns.” This gives you the right to pass your rights and obligations in the contract to someone else, your buyer. You then sell your rights through an assignment contract to your buyer, and they take it from there.
Transactional Funding Strategy
In this strategy, you actually contract and purchase the property. You’re re-selling it to your cash investor buyer. Generally, this strategy creates higher profit margins. You effectively control the property through actual contractual ownership, and set your own selling price. You use a transactional lender to fund the closing of your purchase and get their profits when the deal closes where you’re selling to your cash buyer. This generally happens within hours or a day or so.
If you want short term investment profits, and can do the marketing to build a buyer list and locate motivated sellers, this is a wonderful path to real estate investment profits.