Wholesale Real Estate Investing Articles
For years I shied away from wholesaling as I always felt it was comprised of people praying on elderly or less informed individuals or perhaps people who were just down on their luck and a wholesaler would swoop in and tell them a good story and buy their house out from under them leaving them with very little while the wholesaler made big bucks.
Up until the time I became a licensed real estate Broker about 20 years ago, I was of the belief that all real estate was sold as a retail product where people could move in their families into their new home and live happily ever after. I thought if there was a home that was not move in ready it was simply sold as a handy man special and it would sell cheaper.
Interesting enough I started running into all kinds of people who wanted to or needed to sell their house, but were not able to do so on the retail market (the commonly used multiple listing service (MLS). Often their homes were in dis-repair and would not appeal to a family wanting to move into it. Sometimes the home was not financeable and would not qualify to get a loan further inhibiting an opportunity to sell it. Many times the properties were not even code compliant. Local building and zoning departments put code violations on a property making it impossible to sell on the MLS to the retail buyer.
The Wholesale market now makes great sense to me. With all these different scenarios playing out, there is indeed a market outside of the retail market. A wholesaler provides an outlet that the MLS system cannot. They use market expertise to solve problems that a distressed seller cannot. Whether it be due to lack of money, lack of understanding of how to work within code violations, often just lack of interest. Often these distressed homes are inherited by a family who lives hundreds or thousands of miles away and they simply want these headaches off their plate.
Knowledgeable investors can create win win solutions to help the sellers out. Take control of the properties and quickly sell these to their Buyer's List that they have created. There are always buyers such as contractors looking to keep their crews busy who want to buy these properties, but do not have time to search for them. The wholesaler is really simply finding properties that are distressed meanwhile building a list of buyers who want to buy cheap property. As they bring the two together they get a nice and quick return on their investment.