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8 Benefits of Learning How To Wholesale Real Estate!

wholesale wholesaling Dec 27, 2019

It's hard to fathom where I would be today if it wasn't for making the decision to learn how to wholesale real estate almost a decade ago!

Being a real estate investor has been my livelihood, and learning how to wholesale real estate was the starting point of my investing journey.

Whichever way you look at it, we all have something to gain from learning how to invest in real estate as a wholesaler!

If you’re on the fence about becoming a real estate investor, or don't know exactly how to get started, then wholesaling can be the avenue for you to get started!

Before we get into the 8 Benefits of Learning How To Wholesale Real Estate, let's briefly cover what wholesaling is!

 

Wholesaling Real Estate: What Is it?

Wholesaling is when you find properties that can be purchased below market value, get ownership interest in the property by getting it under contract, and then sell the rights of that contract to an end buyer for a profit.

Wholesaling also entails purchasing the a property and then quickly re-selling it to another buyer for a profit.

Now that you know what wholesaling real estate is, let's get into the benefits!

 

8 Benefits of Learning How To Wholesale Real Estate:

Use this menu to jump to the benefit of your choice!

 

Benefit #1: Wholesaling Profits Can Be Realized Quickly

Wholesaling is extremely attractive to new real estate investors since you can realize quick profits from your deals.

In fact, I don’t know of a faster way to make a profit from real estate investing than wholesaling!

A wholesale transaction for a house can take anywhere from two to six weeks to complete once you have the property under contract. However, there are deals that will happen much quicker. Sometimes it can take only hours or even days to complete a deal!

This makes wholesaling ideal for people who are new to investing in real estate, and for anyone who has a full-time job that wants to get into real estate.

Once you understand the process of wholesaling, you can really start wholesaling real estate without much delay.

As Warren Buffett, one of the best investors in the world, says: “The more you learn, the more you earn.

I have to agree with Warren on this one!

The more knowledge you’re able to gain and the less time it takes you, the quicker you’ll be able to realize profits from this real estate investment strategy.

 

Benefit #2: Minimize Your Risks As Much As Possible

Unfortunately, there are risks with whichever real estate strategy you decided to learn and implement. 

Fortunately, wholesaling can help minimize these risks.

For example, you can spend a lot of your time trying to make a wholesale deal work that never pans out, you can lose money from the marketing campaigns you run, or you could use the wrong real estate contract and get yourself into a pickle.

Wholesaling helps minimize these risks because when you're wholesaling the right way, you do not have to buy the property you get under contract!

In this type of transaction, your goal is to line up your buyer while you still have the property under contract. This way, you don’t have to put one dollar into the deal, therefore, minimizing your risk of losing money,

You can minimize your risks even further by including inspection contingency clauses in the wholesale real estate contract being used. An inspection contingency clause can state if the subject property does not pass yours, or your partner’s personal inspections, then you can cancel the contract without any ramifications.

Furthermore, when wholesaling, you’re also less susceptible to changes in the real estate market.

Upturns and downturns in the real estate market do happen, but usually take months or years to be fully realized.

Since you’re quickly getting the property under contract and selling the rights of the contract, you’re able to get in and out of deals in as soon as weeks, days, or even hours.

 

Benefit #3: Having Bad Or No Credit Does Not Count You Out 

Your credit can be a limiting factor when it comes to buying a house with a mortgage from a bank.

Bad, or even, no credit, can even disqualify you from your ability to get a loan for a house.

However, when you’re a real estate wholesaler, you do not have to get a loan to buy a property since you don’t have to buy the property in order to receive a profit.

Because of this, you can succeed at wholesaling real estate even if you have horrible or no credit!

 

 

Benefit #4: You Can Use Other People's Money To Close Wholesale Deals

There are two main ways to wholesale a property:

  1. You can perform an "Assignment of Contract."
  2. You can "Double-Close." 

When performing an assignment of contract you are not buying or selling the property. You are selling the equitable interest (contract rights to buy the property) in the contract to another buyer in order to receive a profit.

Think of “assigning” as the buyer that wants the deal is just replacing your, or your company’s name, on the contract. Once the end buyer replaces you on the contract, now the end buyer will purchase the deal.

Assigning the contract has less steps and is easier when compared to the second option. 

The second option of performing a Double Close is also called ”A-B-C Closing,” “Simultaneous Closing,” and “Back-to-Back Closing.”

In this scenario, you actually first buy the property and then re-sell the property as soon as possible to the end buyer. 

The great thing about this scenario is that you do not need to have the actual money yourself to buy the property, nor have great credit.

You can use "Other People's Money," such as private lenders, hard money loans, joint venture partners, and banks.

This particular funding used for a double close is called "Transactional Funding.

These types of lenders can typically lend on the basis of the deal itself rather than your credit or income history. At times, this can make having a decent credit score irrelevant if the wholesale deal is a good deal.

Keep in mind that always having multiple capital sources & knowing how to raise money for real estate deals gives you the possibility of getting the best interest rates and origination fees possible. Thus, saving you as much money as possible as a real estate investor.

Both of these closing strategies, assigning the contract and double closing, are doable for any wholesaler - no matter what financial situation you’re in. 

 

Benefit #5: Freedom of Time

Working a nine-to-five job while trading my time for money is something that never interested me.

Fortunately, as a successful real estate wholesaler, you're able to be your own boss and dictate your own schedule.

No one is in control of whether you get fired from your role. You’re in control and get compensated for the hard/smart work you put in.

When wholesaling, you have unlimited learning potential and are not capped at an hourly rate.

This is darn near impossible in a normal corporate job!

What’s freedom of time worth to you?

For me, it’s priceless. Waking up each day knowing that I’m in charge of my time, income, & life is a beautiful thing. I hope that everyone gets to experience this in their lifetime.

Wholesaling & being a real estate investor gives me the time freedom to spend with my family, friends, and loved ones. This would be extremely difficult with a “regular” job working for someone else. 

Additionally, when wholesaling real estate you do not have to spend your time renovating property like a normal fix & flipper. Or, have to manage tenants that are living in your rental properties. 

Which means more time freedom available to do whatever you choose!

If you’re a person who enjoys controlling your time & income, traveling, and spending time with the ones you love most – then consider wholesaling for as the start to your real estate business.

 

Benefit #6: The Constant Opportunity To Learn & Grow

Wholesaling can bring in more income in one month than most peoples’ salary in a year. At times, Pro Wholesaler Members & myself, have been able to generate over $100,000 in a month from wholesaling. 

However, this strategy can be challenging and requires that you’re constantly learning in order to be the best wholesaler you can be.

While some may look at having to continually learn as a nuisance – I look at it as a blessing and opportunity.

Learning is part of personal growth...

When we’re learning, our brains are being activated.

When we’re learning, we're instilling more confidence in ourselves and our abilities.

When we're learning, we're obtaining new strategies to make an income from real estate.

When we’re learning, our comfort zones are being expanded by networking, and we’re meeting wonderful people.

All of these things excite me. What about you?

Doing the same darned thing over and over again can definitely get boring. Fortunately, this is something that you do not have to worry about when wholesaling real estate!

Becoming & being a real estate wholesaler will challenge you because every single deal you work on is always a little different.

Providing the constant benefit & opportunity to always learn and grow!

 

Benefit #7: You Can Wholesale Any Type of Real Estate!

Wholesaling has been around as long as capitalism has been around.

Essentially, wholesaling is getting an asset under contract (or buying) at a low price, and then re-selling it at a higher price!

For years, people have been wholesaling all types of assets, such as: food, equipment, RVs, hoarder houses, office supplies – really anything and everything!

I even taught my own mother about wholesaling and with the knowledge gained, she wholesaled this trailer...

(My mother bought this airstream travel trailer for $10,000. Wholesaled it at $22,000 to an end buyer, and profited $12,000...pretty cool! You can wholesale just about anything, not just real estate!)

The great thing about wholesaling is that you're not just stuck to one piece of real estate.

You can wholesale ANY type of real estate, such as: land, mobile homes, single family houses, multi-family property, office buildings, tiny homes, apartments, and condos.

This makes wholesaling a great strategy for any type of real estate investor!

 

Benefit #8: Wholesaling Is A Gateway to Other Real Estate Investment Strategies

For my colleagues and I, wholesaling houses was the starting point that gave us the confidence and ability to work on bigger & better real estate deals.

For example, my good friend & fellow real estate investor, Stan Gendlin started in real estate 9+ years ago. The first real estate deal he ever completed was a wholesale.

From wholesaling houses, Stan was able to graduate to wholesaling AND fixing & flipping houses. 

Once he was able to get his systems down for wholesaling & flipping houses, then he progressed into buying & holding real estate in order to start building true, long-term generational wealth.

In 2019 alone, Stan and his business partner, Danae, have purchased over 100 rental units. They have more passive income coming from their real estate investments than ever before!

The point I want to make here is that Stan didn't just start fixing & flipping houses, or start investing in apartment buildings right away. Stan started out in real estate by wholesaling, which allowed him to gain experience and a positive track record of successful deals.

From starting out with wholesaling, Stan was able to gain the confidence and "know how" to progress as a real estate investor.

Starting out by wholesaling real estate is an approachable path for any real estate investor.

At Real Estate Skills, we believe in the Evolution of a Real Estate Investor. This is where one learns the ins-and-outs of investing by starting with wholesaling. 

Once you are able to consistently wholesale real estate, then the next logical step is to evolve to fix & flipping (while still actively wholesaling)! Now at this point, you're able to bring in steady streams of profits from wholesaling, while getting larger profits from buying, renovating, and selling houses.

Once you have wholesaling and fix & flipping systemized, now you will start to build a nest egg of capital saved. This is when you can use your capital for buying & holding real estate.

When you buy & hold real estate, you are now investing in rental properties where renters pay you every single month to live in your property. At this stage in the evolution, you are building long-term wealth since your real estate assets are appreciating in value and bringing you passive income every month.

As seen above, the Evolution of a Real Estate Investor, is a realistic approach to becoming a successful investor. 

From following this evolution, you can focus your efforts to only three main strategies. Helping to ensure your efforts do not go wasted!

Because of these reasons, wholesaling is a great starting point and gateway to other real estate strategies!

At times, and especially when starting out, the real estate journey has so many paths.

 

Final Thoughts...

Almost a decade ago, the first deal I ever completed was a wholesale real estate deal. This particular deal generated a wholesale profit of $22,000!

From there, I was able to follow the Evolution of a Real Estate Investor and progress to fixing & flipping houses.

With much hard work and determination, I was able to generate over $1.2 Million in profit from wholesaling & flipping real estate from my first year's acquisitions.

However, my journey only started because I made the decision to: learn how to wholesale real estate.

It was this simple decision that has allowed me to be a real estate investor & entrepreneur for 8+ years!

I hope that profiting from your first wholesale deal is as life changing you as it was for me.

Once you complete your first wholesale deal, you will now understand the entire wholesaling process better than ever before. You'll begin to understand that wholesaling is an achievable path to financial freedom.

From wholesaling real estate, you'll start to see how you can improve your skills to complete deals even faster, and to profit more from each deal.

Since learning how to wholesale real estate changed my life in such a positive way, I want to share my free wholesaling training with you here.

Now you can dive in and see what its all about!

Hope you enjoyed The 8 Benefits of Learning How To Wholesaling Real Estate!

Feel free to reach out and leave a comment below with any questions, or when you complete your first wholesale deal! Congratulations for being well on your way to a successful real estate investing lifestyle. 

Happy Wholesaling!

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