Wholesaling sounds like a dream to many. The mere possibility of earning a quick buck for a minimal amount of work seems absolutely amazing. Therefore, it is completely understandable that so many people buy into this gig after having been blasted with a series of enticing messages, one after another. So I am here today to help you to get face-to-face with reality and fully uncover all the truths surrounding wholesaling because, as with many things in life, there is no an “easy” way to achieving mastery in this niche.
Here we go.
How to Purchase Real Estate With No (or Low) Money!
One of the biggest struggles that many new investors have is in coming up with the money to purchase their first real estate properties. Well, BiggerPockets can help with that too. The Book on Investing in Real Estate with No (and Low) Money Down can give you the tools you need to get started in real estate, even if you don’t have tons of cash lying around.
Don’t Believe It’s Easy
The first point is you have to be extremely cautious of the kind of advice you are taking into consideration. In the complicated world of investments and anything real estate-related, there is absolutely no doubt that wholesaling can be one of the hardest areas to successfully master. Because of this, I would suggest that if anyone ever tells you that wholesaling is a brilliant place to first tap into the world of real estate investing, then there are only two possibilities:
- They are being irrational.
- They are flat-out lying to your face.
Well, regardless of which one it is, don’t buy into the hype! Wholesaling is definitely not a place for newbies and is certainly a not-so-flashy place to begin coming up with some easy cash. This is simply because if you plan on being a wholesaler, you have got to be as well educated in the world of real estate as your potential buyers — and you shouldn’t ever undermine them because they could be absolute pros. From being well versed in rehab costs surrounding properties to being familiar with all the local rules and regulations, you need to be capable of doing the math in your sleep and being able to understand what you can/can’t do with the property.
While none of this is impossible, all this requires experience if it is to be done successfully. Otherwise, you might just find yourself in a terrible situation where you can’t keep up your end of the bargain.
It’s NOT Passive
Not to mention, unlike buy and hold investing, the income involved in wholesaling is actually anything but passive. Its is completely active and hands on. Remember, this is simply because once you stop wholesaling, your flow of income will come to an abrupt halt. So if you say that you wish to earn income passively yet you go out to begin wholesaling, this can seriously be likened to me saying that I want to be debt-free and still continue to borrow loans from the bank.
But if you do decide to get started in the industry by wholesaling, do not get discouraged by this bit of insight. Make sure to properly educate yourself beforehand, and I would recommend partnering with someone who has plenty of deals under their belt.
Investors: What do you think about this assessment?
Let me know with a comment!