Friday, February 24
I remember when I made my first venture into real estate investing. I didn't have a clue whether to rehab property or start out wholesaling property, then make a transition into the fix and flip arena.
I had been in construction for many years and thus decided that rehabbing houses is what I should be doing. There are differing opinions as to what route an investor should take. Some say to get your feet wet in wholesaling when you're staring out. Little to no money out of pocket, never pick up a tool, don't have to deal with contractors, no holding costs are among the top reasons.
Needless to say I started out of the gate with a $40,000 rehab project. Which was fine for me. I knew I could get the work done fast, (we were done in 4 weeks) and I knew that what I did looked good and the job was done right. The one thing I didn't consider was the fact that I only had enough rehab cash to do one flip at a time!
This is a big deal, especially when you're just getting started in the game. It's hard to sustain an income when you may have to sit on one house for 90 days. I did a few house's with this system and finally realized that this wasn't gonna cut it. There are too many unknowns when you're doing a fix and flip to depend on it solely as your primary income, unless you have the cash to withstand the swings of doing multiple rehab projects at once.
Da dat tuh da! Enters thee idea of wholesaling properties as the foundation to funnel cash into the bank consistently while looking for a rehab here and there to keep for yourself. I was lucky enough to hook up with someone to guide me into doing just that. WholesaleDealColorado.com was born!!
In short, don't think that you have to choose to rehab property or wholesale property. Do both! Incorporate both into your business. Use wholesaling as the foundation and rehabbing to knock out a big chunk of change at once.
And as a wise man told me, "rinse and repeat"!