What is Real Estate Wholesaling? How to Get Started in the Business

If you’re interested in getting into the real estate business, but don’t want to deal with tenants or repairs, then wholesaling may be the perfect option for you. Wholesaling is a great way to get started in the real estate market, and it doesn’t require a lot of money or experience. 

Keep on reading to see how real estate wholesaling works, and how you can get started in this exciting business venture!

What is Real Estate Wholesaling? 

Real estate wholesaling is the process of finding properties that are below market value and selling them to investors for a profit. In order to be successful at wholesaling, you need to have a good understanding of the local real estate market, and be able to find properties that are being sold for less than they are worth.

The goal in real estate wholesaling is for the property to be sold to a buyer before the contract with the original homeowner comes due. This implies that no money changes hands between the wholesaler and seller until a buyer is identified by the latter. 

Read more: How to Invest in Real Estate?

But how does one make a profit from a real estate wholesale? A wholesaler makes money by finding a buyer that is willing to pay more than the agreed-upon price for the property. The difference in price paid by the buyer and kept by the wholesaler is the profit.

Wholesaling properties is ideal for individuals who wish to get into the business but don’t have the financial means. One of the best features is that you won’t need to take courses, exams, or even acquire a real estate license to work as a wholesaler. Plus, wholesaling is optimal for people with excellent interpersonal skills.

Creating a Real Estate Wholesaling Plan

The first thing you should do once you’ve decided to enter the field of wholesale real estate is developing your business plan. Our step-by-step guide will help you get started.

Generate Leads

The most important part of your business plan is generating leads. This means finding potential sellers and buyers who are interested in working with you. You can generate leads by contacting local real estate firms, or by searching online for private lenders. 

Once you’ve found a lead, you will need to contact them and introduce yourself. Be sure to explain what you do and how you can help them. It’s also important to build a relationship with potential leads so that they will be more likely to work with you in the future. 

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Set a Fair Purchase Price

The next step in wholesaling real estate for beginners is setting a fair purchase price for the property. This will involve doing some research on comparable properties in the area. You want to be sure to set a price that will allow you to make a profit, but that is also attractive to buyers. 

Create a Buyers List

Once you have a property under contract, it’s time to create your buyers list. This is a list of people who are interested in purchasing the property from you. You can create this list by contacting potential buyers that you’ve met through your networking efforts, or by advertising the property on websites like Craigslist or eBay

Learn more: Real Estate Crowdfunding

How to Find Real Estate for Wholesaling? 

There are a few different ways to find these properties, but the most common method is to look for motivated sellers. Motivated sellers are usually people who need to sell their property quickly, and are willing to accept a lower price in order to do so. You can find motivated sellers by searching online listings, or by contacting real estate agents in your area.

Once you’ve found a motivated seller, the next step is to negotiate a wholesale real estate contract with them. The contract should stipulate that you will be buying the property for a certain price and that they will sell it to you as-is. This means that you will be responsible for any repairs or renovations that need to be made.

After you’ve negotiated the contract, the next step is to find an investor to buy the property from you. You can find investors by contacting local real estate firms, or by searching online for private lenders. Once you’ve found an investor, you will need to negotiate a sale price with them. 

Once the sale is finalized, you will have made a profit! Real estate wholesaling is a great way to get started in the world of real estate investing and can be a very lucrative business. With a little bit of effort, you can be well on your way to becoming a successful real estate wholesaler.

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How to be Successful in Real Estate Wholesaling?

In order to be successful in real estate wholesaling, you need to be able to find great deals and negotiate good contracts. You also need to have a good understanding of the local market, so that you can find properties that are being sold for less than they are worth. 

It’s also important to have excellent interpersonal skills since you will be dealing with a lot of different people throughout the process. If you’re not a people person, wholesaling may not be the optimal career for you. 

Another important factor in being successful in real estate wholesaling is having enough capital to finance your deals. You will need to have money to put down when you find a property, and you will also need to be able to cover the closing costs. 

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Advantages of Real Estate Wholesaling

There are a few advantages of wholesaling real estate that make it an attractive option for many people. One of the biggest advantages is that in most cases, you won’t need to take courses or get a license in order to do it. 

Another advantage is that it’s a great way to get started in the business with very little money. You can find deals that are below market value, which allows you to make a profit even if the sale doesn’t go through. 

Lastly, it’s a great way to build relationships with other real estate professionals. By wholesaling houses, you will have the opportunity to meet many people in the industry and learn from their experiences.

Related article: How to Buy a House in Canada

Disadvantages of Real Estate Wholesaling

There are a few disadvantages of wholesaling real estate that you should be aware of before getting started. One of the biggest disadvantages is that it’s a very time-consuming business. You will need to spend a lot of time looking for deals, negotiating contracts, and finding investors. 

Another disadvantage is that there is a lot of risk involved. You could end up losing money if a deal falls through or if the property is in worse condition than you thought. 

Lastly, it’s important to note that this business is not for everyone. If you’re not comfortable with taking risks or dealing with people, then wholesaling real estate in Canada may not be the right business for you. 

Read more: How much of a Mortgage Can I Afford?

Final Thoughts

Real estate wholesaling is a great way to get started in the world of real estate investing. It’s a relatively easy business to get into, and it can be very lucrative if you’re able to find good deals.

However, it’s important to note that there is some risk involved, and it’s not for everyone. If you’re comfortable with taking risks and dealing with people, then real estate wholesaling may be the perfect business for you.

Related article: What is a Home Equity

FAQ

Is wholesaling real estate legal in Canada?

Yes, real estate wholesaling is legal in Canada. However, each province has its own laws and regulations governing the real estate industry, so it’s important to check with your local authorities before getting started.

 

ABOUT AUTHOR

Mila is an English literature student and a devoted animal's rights advocate. Despite her love for the written word, she's a keen observer of the everyday world and an excellent researcher with a bright and fresh perspective. When she's not doing research, you're most likely to find her out for a walk with her dog or binge-watching a TV show.

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