Newbie Real Estate Investor, wholesale real estate investing is taking a fixer-upper home that needs some kind or renovation, and selling at a deep discount to another party, typically another investor. The property is sold without any work being done at this point.
The profit strategy in wholesale real estate investing, where the money, is from getting a subject property under contract, and building in enough profit that there is some for the wholesale seller, and the investor buyer. The skill required in this strategy comes with the ability of the wholesaler to negotiate well with buyers.
Typically, the wholesale real estate investor never buys the property. He sells the contract to another person.
The pros of wholesale real estate investing are that you do not have your money, or very little at stake. It can also be a source of quick cash. You can actually get a property under contract and have money in 30 days! The average profit is anywhere between $5000-10,000. What if you could do 1 every month?
The cons of wholesale real estate investing are that each deal has a short shelf life. You have to keep turning properties to make money, so it can be just like a job. You are putting a deal together with a seller and an investor buyer so this can be a stressful time, making sure that all parties perform. The wholesale real estate investor must keep marketing and those costs are recurring. This requires time, and there can be dry spells. It can be very discouraging when you start out. Many of your leads will result in no deals, you are looking for a needle in a haystack.
Keep in mind that while there are cons, this is a great place to begin, as this is where you need to start no matter what strategy you choose to specialize in. Learn how to wholesale well, and you will always be able to make things happen. Most successful investors started their career with wholesale real estate investing.