Wholesaling v Rehabbing Real Estate

Although rehabbing houses provides much larger profit spreads than wholesaling houses does, just remember that along with the bigger profits comes bigger risks. If you are comfortable taking those risks, then you should rehab houses. If not, wholesaling is definitely the way to go.

Here are a few reasons:

• - No Money Needed

You really don’t need money to wholesale houses. Yes, you will market your business, but to “control real estate” you don’t need a lot of money.

On the flip side: With rehabbing, since you are literally closing on the house to buy, fix and sell, you will need money from somewhere.

• - No Credit Needed

With wholesaling, no one has to run your credit for anything. The reason for this is because you are not looking to get a loan to purchase a property. All you are doing is “controlling” the property via a contract.

On the flip side: Unless you have or can build relationships with private money individuals like I did in the beginning, you will need to run your credit with hard money lenders (not all), and other lenders as well in order to rehab houses. You can avoid that by simply wholesaling houses.

• - No Experience Needed

Although you don’t need experience with both wholesaling and rehabbing, this is especially true with wholesaling. There is little to no risk when you are wholesaling, so having experience is not necessary.

On the flip side: When you are rehabbing, you need to know how to put the right things into a rehab without over-spending and losing profits. Also, with rehabbing you’re more than likely to use borrowed funds in order to make the deal happen, so you need to make sure things are done correctly.

Topics: Real Estate, Market Trends

Work cited: Jamel Gibbs (https://reiclub.com/articles/wholesaling-rehabbing-real-estate-choice)

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