How to Successfully Wholesale a House
You’ve probably seen those online courses offerings teaching you how to flip homes with no money down. Well, even if you haven’t, we’ll share some of the tips that they are going to tell you. We will also explore an alternative option if you do have the cash to put down on a property.
Ultimately, there are two ways to go about wholesaling a property. One is the nocash down route, or if you have the money for it then you can go with the second path. We’ll start with the method that doesn’t require a penny of your own money. This is great for real estate investors who are just starting out or do not have the required capital to put a down payment on the house.You’ve probably seen those online course offerings teaching you how to flip homes with no money down. Well, even if you haven’t, we’ll share some of the tips that they are going to tell you. We will also explore an alternative option if you do have the cash to put down on a property.
Wholesaling a property with no cash down.
In the US, title companies are your friends. You will want to take advantage of their services when closing your deals.
So here’s the general premise of wholesaling a house without using any cash of your own. Essentially, it boils down to first finding someone that is looking to sell their home as an owner (otherwise known as FSBO – for sale by owner). There are many great deals here. Even if the homeowner has a real estate agent, if the price is right then you may as well give it a ponder.
However, there are two conditions which must be satisfied in order for this type of deal to work in your favor:
The mortgage on the house has to be completely paid off already
You have a cash buyer
Once you find a homeowner looking to sell, you will want to negotiate a price with them that you both agree on before purchasing the house under contract. Typically, this contract is for thirty days before you are required to hand over any money. In the meantime, you will want to find another buyer who is willing to pay more than what you have just agreed to pay. Have them purchase the home from you under contract.
Once this is completed, you arrange to have each party (buyer and seller) meet you at a title company that has agreed to work with you. They will take care of the rest and you will receive a check for your profit margin. The profit margin being the difference between the price you bought the house for and the price the new buyer is willing to pay.
In other countries, title companies may not provide this type of service. This means that you may need to work with a real estate lawyer or other entities that can help you to close deals.
Of course, there are always some tricks to making this process quicker and easier. Imagine if you had a buyer already in the market and ready to buy a house like the one you have to offer. You can also find other companies who are in the business of flipping and renting homes to buy them from you. This way you can create a mini-network of cash ready buyers that you can call as soon as you have an offer.
Wholesaling a property using your own cash.
This method is for you if you spot a profit margin to be made on a wholesale deal and have the cash to buy it outright.
It’s pretty much the same process as above, except this time you are the cash buyer. This means that you don’t have to buy it under contract, rather you can just buy it and then sell it as you please. You won’t be confined to a short contract term of thirty days and can spend some more time finding the most profitable buyer. Although, you should carefully judge whether the improvement margin is worth holding back to find your next deal. The volume of deals you can complete in this business will determine your success.
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