Have you inherited a house from family and you are unsure what to do with it? Do you have a rental property that is in disrepair? Real Estate is a great investment for the future, however, certain properties can be a headache not a cash cow. I hear often when people have a house that they inherit, and think they are going to flip for a few thousand dollars and make a great huge profit or keep it as a rental property. As a property investor, it is never cheap and easy and you never make as much money as you hope to. If you don’t repair and maintain a property correctly you will end up spending more money in the long run because you are constantly fixing the same items.
An alternative solution, if you have equity in the property, is wholesaling the property. In this scenario you find wholesaler, usually an agent who has a list of investors, and sell them your house. Then, they turn around and sell the home to one of their clients and assign the investor the contract. Here is an example with real numbers. You own a house out right and if the home was in good shape it would be worth $100,000. However, the home is very dated and run down and is worth about $55,000 as is. A wholesaler would buyer your home for $55,000 and then tries and sell it to one of his clients for maybe $60,000 or $65,000. Once the property sells the agent owes you $55,000. He keeps the remainder between $55,000 and whatever he sells the property for and the agent makes some money and you make some money without the headache of flipping a property.
The wholesaling option can only work if the house has enough equity. That way everyone can make a profit. You make a profit when you sell, the agent earns with their fee, and then investor who buys at enough of a discount to make money after they renovate and sell or rent the property. Selling Real Estate is like any other business venture, it is all about the money.
The benefit of working with a wholesaler is that the real estate professional has the contacts of preapproved investors and can help you unload a property quickly with little hassle especially if you have never been a landlord or flipped a property.
Wholesaling is not a common option for most sellers, but in the right circumstance it can be a great way to move a distressed property quickly and easily.