If you're getting started in real estate investing, you may be wondering if working with a wholesaler is a good idea. In some cases, it can be! You might have heard about wholesaling but wonder what it is and if it's something you should consider for your real estate investing team.
What is "wholesaling?" How can it help you build a successful real estate portfolio? Today Privy talks about how partnering with a wholesaler can be an easy real estate investing strategy with the right approach.
What Is a Real Estate Wholesaler?
Wholesalers can help investors find distressed properties at low prices to renovate as a fix-and-flip investment or turn into a rental property. They essentially serve as a go-between for buyers and sellers, connecting the two parties when the seller needs to sell a property quickly, and the buyer is willing to purchase it "as is."
Real estate wholesalers contract a residential property from the buyer—but they never take full ownership or put any money down on the property or into it for renovations. They then shop that property around to interested buyers or real estate investors for a percentage of the final sale price.
Wholesalers move quickly with the goal of selling the property to a new buyer before the original contract with the owner closes. This is crucial so that no money needs to change hands between the wholesaler and the owner.
Working with a wholesaler can be an excellent strategy for investors who are ready to move quickly when purchasing new real estate investment properties and have cash or financing in place to close on new homes.
What Are the Benefits of Working With a Wholesaler?
So, why should a real estate investor consider partnering with a wholesaler on their real estate investing team? There are several benefits of working with a real estate wholesaler!
Find Deals Aren't On the Market
First, they can help you find deals for rental properties or fix-and-flip opportunities that may not be available on the open real estate market (or hit the market, then quickly go under contract with the wholesaler). In many cases, wholesalers work with sellers ready to make a quick sale—so good properties might never make it to many online listing sites.
Get Started With Real Estate Investing Quickly
Second, they can help when learning how to get into investing in real estate, even if you don't have a lot of money and without lengthy delays to find your first properties. Investors can often find wholesalers that can help them find properties they can purchase below market value.
Move Quickly On Hot Properties
Third, the right wholesaler can help you move quickly on an investment property so you can make a profit before someone else snaps them up. When you work with a wholesaler, they take on all of the work of finding and vetting potential investment properties for you. They'll do all of the hard work so you can focus on your strengths as an investor.
Build a Relationship to Grow Your Real Estate Portfolio
Fourth, by working with a wholesaler, you're able to build a relationship with someone who can help you grow your residential real estate portfolio over time. As you work with more and more wholesalers, they'll get to know what you're looking for in a property and can start sending you deals that fit your investing strategy.
How to Work With a Real Estate Wholesaler
Now that you know the basics about what a real estate wholesaler is and the benefits of working with them, how do you go about finding and working with one?
Check out online directories or lists of wholesalers in your area. You can also ask other investors if they have any recommendations for reputable wholesalers to work with.
Once you've identified a few potential wholesalers, take some time to interview them and see if they're a good fit for you. Be sure to ask about their experience, what types of properties they're typically involved with, and how they like to work with investors.
Choose Your Partner Wisely
It's important to remember that wholesalers are middlemen, and not all wholesalers are reliable or reputable. They contract a residential property but never take ownership. This means that they will shop the property to potential investors and then assign the contract to the one with the best offer.
If you choose to add a wholesaler to your REI team, make sure you vet them thoroughly. Find someone you can trust to make good deals and deliver properties that won't turn into money pits after closing on the sale.
Privy Helps Investors Find Great Properties and Great Deals—Fast!
If working with a wholesaler doesn't seem like the right fit for your investing strategy, remember that Privy can help you find properties quickly at the best prices!
With the Privy Advantage, you don't have to worry about working with a middleman or potentially risky investments. Privy's software gives you access to deals that you may not be able to find by searching the MLS or other listing sites. Plus, we deliver properties to your inbox that meet your criteria, along with investor insights to help you make good offers and close deals fast. Reach out to our team to learn more about how Privy works!
Get our free resource, the "Assemble Your Real Estate Investing Team: A Worksheet,” to learn more about building your REI team!