One of the most frequently asked questions by people outside of the real estate business is this:
Do I need any money to get started in the wholesaling business?
If you listen to most of the “real estate gurus” in the business, you don’t need any money to start. In fact, you can start assigning contracts without spending any money at all, and without doing any work. What a business!
The only problem with this advice?
It’s a bunch of crap.
The truth is that you do need to put up a little bit of money up front to start your wholesaling business. But the good news is that you don’t need a lot – at all. You don’t need good credit, since you won’t be applying for credit or even need credit at any point in the transaction. You don’t need $100k, $20k, $10k, or even $5k.
For a very, very minimal amount of money, you can begin your real estate adventure. You do not need immaculate credit or a boatload of cash.
So What do I Need?
The reason you don’t need credit or cash when wholesaling properties is because you don’t need to put any money down when assigning contracts. Assigning contracts is when one person (the assigner) transfers all his contractual responsibilities for a property onto another person (the assignee). No credit is needed and no money is required.
For wholesaling properties, the only thing you really need to do is find an assignee for a certain property – that’s half the battle. (Who are we kidding, it’s about 90 percent of the battle.) In this way, you’re not in the real estate business – you’re in the marketing business.
You need to be able to market the right property to the right person.
Your prosperity depends on getting a hold of people, generating leads, and making offers. Ultimately, you’re doing deals. But how can you complete deals if you can’t get a hold of people to get the deals in the first place?
A successful contract assigner will put a modest amount of money up front so he can properly market his property – direct mail, letters, phone calls. These cost a little bit of cash and time – but not a lot.
Now What Do I Do?
If money from your primary job is particularly tight, try getting multiple part-time jobs. This way, you can have multiple sources of income to cover expenses and create some seed money for your wholesaling business.
In order to be successful in wholesaling, you absolutely need to be driven and self-motivated. (Click to Tweet That!)
Take that drive, work some part-time jobs to get funds for a start up, and use that momentum to market your properties as aggressively as you can.
Consider this myth busted. Forget what other “gurus” have told you about entering the wholesaling business with no drive, no work, no money, and becoming an instant success.
The truth is that success only comes from working HARD, hustling, and taking a little bit of risk by investing a small amount of money.
Get a few part-time jobs, create some seed money, market the heck out of your properties, and congratulations – you’re well on your way to a successful wholesaling business, with hardly any money down.
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Photo Credit: TheeErinMyths and Truths: Do I Need Money to Get Started Wholesaling? by Mike Nelson