Hello I’m new to re investing. I would love to hear from people investing in the Cleveland area. I was thinking it would be ideal to start off wholesaling but now I’m thinking why not just fix and flip and pick up a few rental properties along the way? Anyone have any thoughts?
Hello I’m new to re investing. I would love to hear from people investing in the Cleveland area. I was thinking it would be ideal to start off wholesaling but now I’m thinking why not just fix and flip and pick up a few rental properties along the way? Anyone have any thoughts?
Wholesaling as it's taught is a myth. You need a license to Broker real estate. That's all wholesaling is as it's taught in these programs, it's brokering real estate except instead of being up front & telling the distressed seller that you'll sell their property for X amount & take X amount as your commission / fee you are taught to lie to the seller & pretend you are going to buy the property while you secretly attempt to "assign" your contract.
It doesn't work. Nobody has any respect for wholesalers. The only people making money wholesaling are the guys selling you all of that education.
To be successful connecting buyers and sellers you need to have
An in depth knowledge of the market.
Marketing skills.
Sales skills.
Negotiation skills.
Accurately estimate rehab costs.
Understand how to much time it would cost to run a renovation on the properties you are presenting.
My advice get a real estate license. Way cheaper, no legal issues, more respect and there is a decent chunk of cheap or free training out there from the mega brokerages. Soak it all in while you're trying to get off the ground. It's not an easy job, 90% fail rate but it's better than the 99.9% "wholesaler" fail rate.
Thanks for your advice. I do plan on getting a license within the next few months. I don’t like the idea of assigning contracts. Originally I wanted to buy distressed properties outright and try to find flippers or landlords; however the more I think about it, I’d prefer doing the rehab myself, sell it retail or keep it as a rental if the numbers make sense.
That all depends on many many things. Do you have capital? Experience? Someone with either? Wholesaling has the lower barrier of entry but its not easy by any means. You have to go through many no's to get a yes.
And flips isn't just finding a rundown property and fixing and selling. You have to have the right property first off and then financing/cash in place, find a good contractor and manage it, sell it for top dollar on the back end. There's plenty of run down homes in Cleveland but that doesn't mean they're good flips.
As far as the license goes, I'm not licensed in Cleveland but if it's anything like CA i would advise against it unless you are going to be doing properties consistently. 3% of a $150,000 home (which is a really nice home in most areas) is $4500 (before brokerage splits). Is that $4500 worth going to all the licensing classes, studying for the exam, relying on yourself for contracts, marketing, possible broker fees, association fees etc etc. There's a lot of things to keep in mind.
Dan, I'm new as well. I've flipped one house in 2018 and I loved it. I'm thinking about purchasing another flip but I'd also like to build a portfolio of rentals as a long term passive income - so many options to create so many additional questions. Conventional vs. private lending vs HELOC - I need some direction! Looking for some general suggestions here. Lorain County is where I'm going to start. Please help!