When I first started learning about making money with real estate, I often found myself overwhelmed. There were so many different strategies available (short sales, rehabbing, buy and hold, subject to, wholesaling, etc), that it was hard to choose just one. One month I would be reading everything I could get my hands on about subject to investing, and the next I would be learning about short sales.
I finally came to the realization that if I wanted to succeed, I needed to pick just one strategy and focus on it like a laser. After careful consideration, I decided that wholesaling was the strategy that made the most sense for me. Following are four reasons why:
Little to no Risk Involved- When wholesaling, you are not actually taking title to the properties, but rather assigning your interest in your contract to purchase. There are no worries about holding costs, unexpected repairs, non-paying tenants, etc. You’re in and out of the deal quickly, with very little at risk.
Low Start Up Costs- While it is much easier to get started if you have some extra cash for marketing expenses, it is still possible to get your wholesaling business up and running even if you are on a shoestring budget. When I was getting started, I didn’t have a lot of extra cash for marketing or earnest money deposits, so I found cheap ways to advertise, and only offered one hundred bucks or less for earnest money deposits.
Credit is Not an Issue- Since you will not be purchasing the properties you put under contract to wholesale, there is no need to obtain financing, and therefore your credit is not an issue. For those who have bad credit or who are in the process of repairing it, wholesaling is still a viable option.
Quick Paydays- Unlike many other real estate money-making strategies, wholesaling properties can put a check in your pocket in a relatively short amount of time. As a matter of fact, I just closed a deal last week that took only four days from start to finish! While most deals normally take a little longer than that to get to the closing table, you can usually expect to get paid within a month of getting a deal under contract.
While wholesaling may not be a good fit for everyone, it is definitely a strategy to consider if you’re looking to make some quick cash and don’t have a lot of money to get started!