Does Wholesaling make sense?

Question

I'm curious to understand how wholesaling works? I understand how it works but want to know how wholesaler's make money? If you are a wholesaler, you get a property under contract (by putting the Earnest Money Deposit) in escrow then you have a certain amount of time to find an buyer/investor to assign the contract over. Right? What are the fees you charge on top of the price? Is it a flat fee or an percentage? If you don't find a buyer by a certain period, do you loose your deposit?

Your insight would be greatly appreciated....

Michael Tanu · Answer

Have fun in prison Richard. Your profile says "I believe in hard work.".....proceeds to steal covid funds of $4,750,000

Richard Ayvazyan · Answer

Sunny,

Thanks for your reply.  I've been doing a little research from Department of Real Estate and found this.  It clearly says that you would have to be a Broker.

Sunny Vig · Answer

Hi Richard,

You don't need any lic. if you are a principle in a transaction.

Richard Ayvazyan · Answer

Thanks guys for all the input.  One more question.  Does wholesaling require a real estate/broker license? Specifically in California?

Phil Z. · Answer

- Find Cash Buyers FIRST, then find them deals.

- You need to put a property under contract for less than your Cash Buyers will pay.  Your profit is the difference in the form of an assignment fee.

Edward Peugh · Answer

@Richard Ayvazyan K, so yes you can actually do very well in wholesaling.  The margin you can charge depends on the deal.  Remember you will always have to sell the deal at a price that is still very competitive for an investor.  Which means the more aggressively you can get the deal under contract, the more margin you will have.  These are all points of negotiation both with your seller, and with your end buyer.

I do want to clarify one thing, We often get into real estate deals with no money at risk.  Zero.  As long as you have  a clear understanding of the timeline for your contract, you really have very little risk.

My suggestion to get you off the ground would be to start attending local meetups and investment clubs and ask as many questions as possible. (I am certain there are a large number of them in the Encino area)  Some people won't appreciate that you are "Just Starting", and asking questions, that's ok.  Find folks who are open to discuss the business with you.

Grant Cardone Teaches that we live in world of abundance not scarcity, and this include knowledge.  Good Luck!  Let me know if I can help.

Ed