Why Wholesalers are Real Estate Experts:
Tuesday, January 29
Are all real estate wholesalers created equal? Or are there some that are better than others?
This purpose of this article is not to bash other real estate investors, but to shed light on the unique group of real estate investors often termed “wholesalers.”Wholesalers are real estate investors whose talent is often overshadowed by less-experienced wholesalers that give them a bad reputation.
What makes a "GREAT" Wholesaler?
In order to be considered a “great” real estate wholesaler you have to have all of the characteristics of a real estate professional combined. A great wholesaler must be a Rehabber (one who purchases a property, fixes it up and resells it), landlord (one who specializes in purchasing properties to rent out) and a real estate agent (one who finds the properties for the landlords and the rehabbers). These individuals all have special traits that set them apart from the others: The rehabber is able to see what a property could look like after repaired and purchase it low enough to still be able to make a profit. The landlord has the ability to look at a property and analyze whether it will give the investor a good return on their investment. Finally, the real estate agent is good at finding the properties for these type of investors often through a MLS (Multiple Listing Service) and then send them to the investors to see if they are interested. Overall, each individual here plays a specific role in the in the purchase of a property. Each all has a specialized skill that works for him.
So where does the wholesaler come into play? A wholesaler is an individual that goes after properties, buys them for a discounted price and then turns around and resells it for a profit. In order to locate cheap properties, wholesalers have to beat out rehabbers, landlords, and real estate agents before they can claim the property for themselves. Wholesalers must have extensive marketing techniques and superb negotiating skills in order to get a low price on the property. Additionally, real estate wholesalers are able to evaluate the recently-sold surrounding properties and market these properties to attract interest – the wholesalers in this case are working against the real estate agents who have access to the MLS and can locate properties and attract interest much more easily. Finally, wholesalers are able to determine the cash flow of a given house and evaluate whether the property would be a good investment for a landlord.
The true skill of a "GREAT" wholesaler
Talented wholesalers often get overlooked due to the mistakes of other, less experienced wholesalers. Some mistakes that a novice wholesaler might make could include advertising properties that he didn't have under contract, or something equally unwise. An experienced wholesaler will be able to find properties for deep discounts, offer them to the rehabber or investor, and profit on the sale of the property. For best results, seasoned investors should find themselves experienced wholesalers, and inexperienced wholesalers should hone their skills to better their reputations and, ultimately, make some money in the business.