As real estate agents, we are always looking for ways to bring in more money. While creating your own business is an excellent way to make extra income, wholesaling is one of the best strategies if you don’t mind investing in some supplies or having someone else do the work for you.
Wholesaling was the industry standard back when I first started working as a real estate agent. It is still very popular today, and there are many people who make a good living from it!
There are actually three main types of wholesale transactions. The most common ones are buying direct from the manufacturer or distributor at a discount, selling via online platforms like Amazon, and sourcing goods through suppliers and then re-selling them. Each of these methods can be done profitably.
In this article, I will talk about how to start wholesaling and the benefits of doing so. Also, I will discuss all three of the above and what makes the best sense for you to get involved in.
Select a product and market
As mentioned earlier, being able to wholesale real estate comes down to knowing your products and markets well. So what are some of the best ways to do that?
Online courses are one of the most efficient ways to gain knowledge. There are many great resources available online today for anyone to learn about the art of wholesaling.
You can pick up everything from how to use Instagram to find a home buyer to why having a business model is important when selling a property to the difference between using manual tools like spreadsheets and software designed to help you in this article.
Fund your business
In fact, there are many ways you can begin wholesaling real estate without having to be licensed as such! Some of the best ways include investing in or donating to an area that needs new homes, or buying a home that is currently underpriced and then marketing and selling it.
You can also start by picking a niche and becoming known within that field. For example, if you’re very familiar with making sure tenants are legally protected from landlords, then starting your own rental property management company is a great way to go.
Pick your business location
As mentioned before, being able to wholesale real estate means picking your own territory. This can be as small as one city or state up until international wholesaling in which case it is multiple cities and states across continents!
The most important thing when choosing where you will open your business is going to depend on what kind of broker you are and how much money you want to make.
If you are just looking to break even, then there’s no need to be located close to major markets. You can survive by serving local clients only.
On the other hand, if you would like to earn more than you would working for nothing, then you have to choose a place that has a high demand of brokers. A low supply of skilled professionals also helps boost earnings.
Also consider whether or not you feel comfortable in this area so that you do not have to worry about safety. Make sure to research the best neighborhoods and the type of people they attract.
Open a business bank account
After you have determined that wholesaling is right for you, your next step will be to open an online banking account. This can be done through any major lender such as Chase, Wells Fargo or BB&T.
Most lenders require you to put in your business name and the paperwork that proves who owns what property you are buying. They also ask if you do business offshore so they can check whether there are any legal hurdles when it comes time to close down the company.
This is all part of doing business with a bank and making sure everything goes smoothly for you and your clients.
Create marketing materials
After you have your domain name and hosting, it’s time to start creating some marketing material! You will need to create your business cards, flyer, brochure, etc.
You can either do this yourself or you can hire someone to help you. Either way, don’t spend lots of money until you know what products and services you want to represent yourself.
By representing yourself, you save money by not having to pay for expensive advertising fees or royalties. But, if you are going to hire professionals to help with design and printing, make sure they fit into your company culture and that they are professional level artists.
Don’t just go through an online provider because they are cheaper, investigate them thoroughly! Read reviews, talk to other sellers, and look at their portfolios. Find one that fits in well with your brand and is a trustworthy person or company.
We recommend doing beginner wholesaling during the winter season (November-February). This is due to lower traffic during these months as people are away from work and students are in school.
During this period there is less competition so your sales will be higher. Also, most stores close over the summer break, which is around July – September. During these times there is less foot traffic and business being done at any given store.
From March–June and October–December is our recommended season due to more activity and people working and studying.
There are many ways to wholesale real estate, but starting with something simple is the best way to go about it. Starting off with some easy wholesaling strategies will give you the foundations of wholesaling!
The first thing that most people start doing when they want to wholesale properties is looking for a property they love and then trying to find another person who loves this same property.
This can be tricky as not every seller wants to sell their home. This is totally fine, you should always feel free to shop without any limitations.
However, if you really wanted to get into the business of wholesaling, then finding a house that someone else does not like may help you gain access to more homes.
You could try talking to your friends, family, and colleagues to see if anyone knows of anything that they have been wanting to get rid of. Many times, these sellers will let other people know about the house so that you can work together to make a deal on the house.
There are many ways to source a house far beyond just asking around if your own personal network is enough.
Choose a distributor
As mentioned before, you will need a good source of income to be a wholesaler. Luckily, there are many ways that you can make money as a real estate wholesale investor. Some of the most popular routes include being an agent or broker-broker, investing in property, or buying and selling at auction.
Any of these types of investors must have a strong business model in place to succeed. You will earn more if you know how to cater to your clients’ needs and keep up with changing market conditions.
There are several companies out there who offer various levels of service for real estate brokers and agents. Many of these firms also provide services such as marketing materials and training courses for those looking to start their own businesses.
They may even help you get started by paying transfer fees or giving you free startup resources and funds. By joining their team, you are supporting both yourself and the community.
Work with a distributor
As we mentioned before, working as an agent is not the only way to wholesalelicence a property. Another option is to work with a distribution company that has their own real estate investing team!
A distribution house is an entity that holds a large amount of properties – they’re called distributors because they distribute those houses to you so you can purchase them or invest in them.
The easiest way to do this is to become a member — and pay monthly membership fees for — one of these companies. Then, when you find a property that you want to buy, you place it with the right person at the right time, and your investment will be processed and funded by the organization.
This is very helpful because they handle all the paperwork, negotiations, etc., leaving you free to focus on other things. Some of the most well-known distributions are RE/MAX, Keller Williams, and The BHG Team. All of these have minimal requirements to join, and there are many benefits depending on which level you are enrolled in.