Wholesaling vs Flipping

7 Replies

Which strategy is better for gaining experience in RE investing? Also, which is best to build capital to later get into rentals?

Wholesaling has a very low barier to entry. You can get started without any capital.

Flipping you have more risks but the returns are also higher.

I find that a lot of wholesalers have terribly bad deals because they have never flipped themselves.

Imo, you learn a lot more flipping houses.

But having said, wholesaling forces to get in front of people. Marketing yourself and your deals is key for wholesaling.

That is a very valuable skill which we'll come handy if you ever have to raise capital.

you can and should do both. They both involve finding good off market deals. If you don’t have the funds to flip or the time you try to wholesale the property, but finding those great deals is the first think you gotta do

I too am also getting involved in wholesaling. I have already found a buyer or two, and am going to see if I can visit other buyers to add to my list. I've been looking for leads for sellers as well, but I can't seem to quite find them. I've been looking at FSBO a lot, but other than that not much else. I'm really hoping to learn more.

Do both. If you're looking for a job in real estate. Flipping is one of the riskiest paths in real estate but the most popular because it's sexy and gets the spotlight. If you're going to flip, get a mentor or a partner. 

I understand the frustration people have with working with wholesalers who don’t have good deals. Which is why i want to learn enough about flipping to provide great deals where everyone wins

Hey Hunter welcome to bp as others have said it really should be a combination of both. If you have any contractor friends they can give you some advice on rehab costs. Most of the wholesalers I have encountered are miserably off on the rehab estimates. Like 50% off they have never flipped a house so they are just guessing in my experience. This of course turns off cash buyers we just roll our eyes once we get into the house like how in the world can this turn a profit. Also if you are going to use the nicest 3 houses in the neighborhood as comps then your rehab budget better be higher to account for that granite, bamboo floors etc. Good luck reach out if you ever need help!

In this tight inventory market, it's far easier for you to find a 70% ARV home than it is a 60% ARV home to have room for an assignment fee.

Obviously, we do it every day in both categories, but I'm also a Licensed GC with dozens of crews, a full office team including a rehab manager, etc... so it makes flipping very easy for us.

Flipping is much riskier from a time, money, rehab, construction, crew, theft, vandalism during ownership, lawsuit, insurance, holding cost perspective....but we still do plenty of them.

We used to be 80-90% retail flips.  Now, out of our 15-20+ deals/mo, we're doing 30-40% flips and passing the rest on without major rehab via wholesale, wholetail, As-is resale, etc.  

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