Rehabbing or Wholesaling? Which is better
I'm investing in Real Estate Full time, and wondering which is better overall in terms of profits, time spent etc. Right now, I'm doing wholesaling and have decent success. Would like to start making 100k+ a year. Any wholesalers or rehabbers doing this? Any experienced investors know which is the best route to go? My main goal is to get into commercial. Thanks
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It really depends on your skillset, your interests, your financial situation, your time constraints, etc...
Personally, I would never want to wholesale. To be a successful wholesaler, you need to spend quite a bit of time working directly with buyers and sellers. Personally, I don't like dealing with buyers and sellers; I'm not a sales person, and while I love to negotiate, I don't like the "relationship" part of the business. Wholesaling requires a lot of time marketing, selling, and talking to people -- things I want to avoid.
But, that doesn't mean wholesaling isn't a great way to make money! It's just not for me given my situation, my interests, my goals, etc...
On the other hand, I can flip 15-20 houses a year pretty easily without ever having to deal with a buyer or seller directly. The way I do it, flipping houses is all about running numbers and making quantitative decisions (for the most part). I don't need to do any marketing (I have a full-time real estate agent on-staff), I don't need to do any selling (again, my agent does that), and other than dealing with contractors, I don't need to talk to people. And to avoid having to deal with contractors, I employ a full-time project manager.
So, for me personally, flipping houses is a MUCH better choice than wholesaling. But, again, that's based on my situation and perspective.
Just like every other job out there, your personality, skills, and desires are going to play a big role in how you perceive different types of real estate investing. If you pick an avenue that's consistent with what you're good at and enjoy, you'll likely be successful. If you pick an avenue opposite what you are good at and enjoy, you'll likely fail.
Specifically in terms of profits, I was able to make a gross profit of about $225K my first year of rehabbing/flipping (year one just ended two days ago), so I know it's possible to make good money flipping houses.
And that was only working about 20-30 hours a week. That's the other reason why I love flipping more than wholesaling...