Playbook #048: Wholesaling
🖼️ The Big Picture
Wholesaling is an arbitrage real estate strategy that simply means getting an agreement to buy an asset for one price, and then selling it for more (usually around 5% - 10% more)… without having to close on it.
Because it can be done without having to bring a down payment or acquire financing, it’s a popular strategy for beginners looking to get into the real estate game.
Supplementing your income or making a living using wholesaling alone is essentially a job. You need to constantly market to bring in new leads, negotiate them down, and find buyers.
However, “buy and holders” - who don’t want to sell the golden goose so to speak - will also use wholesaling to monetize deals they work on but don’t want to buy. Maybe the project needs too big of a rehab or is in a really bad area. Just because you don’t want to deal with certain challenges doesn’t mean someone else wouldn’t buy that asset for a great price.
You can wholesale anything. Most people do it with single family houses, but you can also do it with land, multifamily apartments, mobile home parks, and even hotels.
There are even variations on the strategy where you can acquire a property with seller financing, and then wholesale it to another buyer with seller financing - and make the spread not only on the down payment but the monthly payments as well.
Though some people have developed advanced systems and built teams to build a thriving wholesaling business, most experienced investors will tell you that it can be a great way to get started, and great strategy to have in your toolbox as you develop as an investor into bigger and more advanced kinds of deals like we’ve shared in other issues of CAPITALIZE.