Hello all, I’m fairly new and wanted to pick peoples brains on “house flipping” And “wholesaling” . I’ll be brutally honest, I currently don’t have a budget. I was initially told I wouldn’t need a budget but I found it hard to believe. That same individual lead me to this site. Any help or advice would be greatly appreciated, thank you.
China, ME · Member since 2014 · 3k+ posts · 4k+ votes
4y
House flipping (buy, fix, sell) is a world away from wholesaling (tell a seller that you'll buy their house, even though you won't, assign the contract to someone at a higher price, hope the deal closes, pocket the difference).
Wholesaling is in general, unlicensed real estate brokering and is illegal in most locations - no matter what the gurus say. Most often the wholesaler is stripping equity by signing a contract that they know they can't perform. It is the dark underbelly of the real estate world because it preys on the desperate and ignorant. It's win-lose.
Flippping on the other hand is a true win-win. You buy a house that's in bad shape and maybe even abandoned. You fix it up, put it back on the tax roles. The seller gets out of a difficult situation, the buyer gets a newly renovated house and the neighborhood improves. Everybody wins!
However, you cannot do either without a budget. Wholesaling requires a huge marketing spend and dodging the state regulators. Flipping requires a budget to buy the dilapidated property and for repairs. Don't forget to add 20% for the unforeseen.
If you really want to get started in real estate, consider getting your real estate license. There are expenses there too - pre-licensing classes, license fees, continuing education, MLS fees, NAR fees (sometimes optional, sometimes not), marketing costs (business cards, signs, etc). You might find that it's worth the investment - and you might also ease into rehabbing at the same time.
Investor · Tampa, FL · Member since 2011 · 2k+ posts · 3k+ votes
4y
Your instincts are correct; With no budget you will fail at either strategy. Your best bet is to get a job in real estate however you can. Save up some money, gain some knowledge, and when the time comes, head out on your own to house flip or wholesale.