What is Real Estate Wholesaling?

Question

Hi guys I'm a wholesaler who just found out about this strategy/ term called wholetailing. I'm not really sure what it entails, so I figured I'd come on here and ask. From my understanding, it's when you get a property under contract at a low price and then list it on market for retail value doing minor repairs if needed. I have a property in my pipeline that may be good for this however, I'm not sure if I should go through with it. The ARV is $385k, and the seller wants $250k it's a 5 bedroom 3.5 bathroom in Atlanta Ga 30331, and needs minor repairs. Let me know what y'all think.

Lydia R. · Answer

Great question. Wholetailing is when you PURCHASE an off market deal and then LIST it on the market at a higher price than you couldve gotten if you sold it off market. I have done several of these. Both retail condition properties and distressed condition properties. When done right, the profits are far greater than an off market assignment.

You cannot list a property for sale that you do not own. Having a purchase agreement does not give you the ability to list a property for sale. You have to purchase it and take title first. There are lots of lenders that will loan on these types of deals.

Lydia R. · Answer

Interesting! That explains why novation has become such a popular topic. Thanks for the info, the only state I knew where you could list a property that you had under contract is NY but the seller has to agree to allow this. Didn't know there were other states that also allowed this. I learn something new every day!

Bob S. · Answer

Impossible to answer. Go to your local RE meeting, learn then apply what you learn, you are not ready ,,,,,yet

Good luck

Wale Lawal · Answer

@Amani Clarke

Real estate wholesaling is a strategy in which a wholesaler obtains a contract on a property with its seller, and in turn sells the contract to an investor. Wholesalers start by looking for a discounted property to put under contract.Wholesalers will often look for distressed properties priced below market value. These properties usually need quite a bit of work, and the owner is often motivated to sell and isn’t interested in working with a real estate agent.From there, the wholesaler will enter into a wholesale real estate contract and then reassign the contract to an end buyer for a higher price. This is known as a wholesale fee and usually costs 5% – 10% of the total property price.If you’re interested in becoming a real estate investor but are worried you don’t have enough capital, wholesaling real estate may be a good option for you.

If you’re looking for a low-cost way to invest in real estate, wholesaling could be a good option for you. As a wholesaler, you can tap into new markets and earn a profit on your investment.

All the best!

Marc Maitre · Answer

If you want to learn about wholesaling, learn from Flip with Rick. All of his content is free and he breaks it down in his freecourse  https://www.flipwithrick.com/m...

JD Monroe · Answer

@Lydia R. This is state dependent. There are states that allow you to list assignments, or another option to "list" a Property you do not own is by utilizing a novation agreement.@Amani Clarke for Wholetail deals, The ARV doesn't really mean much. You need to know the current condition value. So that means pulling comps for sold properties in the same style and condition as your subject property. Ideally the wholetail deal is in good enough condition to get financing so it appeals to retail buyers on the MLS. You should try to put it under contract at a price low enough that when you list it, you can list it slightly lower than the other similar properties.For us, on a wholetail, we usually need to put the property under contract for $50k less than our list price to make it a profitable deal worth our time. A discount of $50k accounts for 2 sets of closing costs, Realtor Fees, and Cost of Money in addition to our expected profit.

Michael Dumler · Answer

@Amani Clarke, couple of questions to address. How do you know the property only needs minor repairs? What platform did you use to pull comparables? Moreover, what are your criteria when pullings comps? Is the property listed on-market? Does the seller have other offers on the table? How long has the property been vacant? Does the seller own the property free and clear? Are all five bedrooms and three bathrooms permitted according to City/County code? Yes, wholetailing is essentially buying below market value and re-listing to make a profit. As an investor-focused real estate agent in the ATL market, I can assist you depending on the details noted above. Feel free to shoot me an email to connect (contact info is listed in my bio).

Melissa Haworth · Answer

Jump on a free coaching call with @JD Monroe and he can walk you through it in more detail!

https://mailchi.mp/458f1b418e9...

What is Real Estate Wholesaling?

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