Real estate investors are wild about wholesaling properties, for a few main reasons: wholesaling properties can yield big profits and requires little upfront costs. Today, we’re talking with Jacques Poujade, a trusted expert when it comes to real estate and real estate investing. As a managing partner at LendPlus, Poujade is a wealth of information when it comes to all things real estate. He’s discussing why real estate investors love wholesaling properties.
What does it mean when investors wholesale properties?
Poujade: Real estate wholesaling is very different than what you might think, say for example, when someone says, “retail wholesaling.” In real estate wholesaling, the wholesaler contracts a property that already has a seller. Then, they act as the middleman, and finds potential buyers. The idea is for the wholesaler to find a buyer, before the original seller does. The wholesaler can find a buyer willing to pay more money, and that’s how they make a profit in the deal. They keep the difference in the price.
Why are investors interested in wholesaling properties?
Poujade: The process involves very little upfront investment from the wholesaler. You don’t need to invest in the property yourself. For example, buying a property to flip takes capital, along with time, paperwork, and lots of nuances. Real estate wholesaling is a whole different game. Investors are able to make sometimes substantial profits, without investing their own money in the process.
What makes a property good for wholesaling?
Poujade: While it can be lucrative, real estate wholesaling isn’t for everybody. The first step is finding the right property. A lot of time, real estate wholesaling is best for properties that are in distress, and that require some work. The good thing is, it’s not up to the wholesaler to do the work. If the property is in a desirable location, that makes it even better.
What might make real estate wholesaling difficult?
Poujade: It can take time to figure out how to price the properties you’re wholesaling. You don’t want to go too high, and scare off potential buyers, but you want to make the transaction worth your time and energy. You also need to do your research on the property and see what kind of repairs and renovations would need to be done, so you’re an expert in what you’re selling. This will make you a better wholesaler all around. But in general, the process of real estate wholesaling can take a lot of time and patience and requires the ability to market your property. Having a network of investors is also useful.
Poujade: I’m always happy to answer questions and share information about this sector. In general, people interested in real estate wholesaling should be well-educated about real estate in general. I share a lot of information about real estate and real estate investing on my social media, such as on my Instagram. I also recently was featured in a Feedster.com interview where I talked about how to know when it’s a good time to sell your home. Keeping up with the latest information and trends in general is a great way to make sure you’re well educated, before you take any sort of plunge in real estate.