Unconventional practices can be hard to follow, but are extremely profitable in most cases. When it comes to real estate dealing, you can opt for reverse wholesaling as an unconventional means of real estate with significant revenue on the card.
For starters, reverse wholesaling is extremely similar to real estate wholesaling, only with a few differences. Both of these techniques offer great revenue generation for real estate investors and help them flip properties to get profits while investing little to no capital.
To simplify the process for starters, both reverse wholesaling and wholesaling happen to work as flip sides of the same coin. To simplify the whole process, wholesaling refers to finding a property first before you go on to hunt for a buyer. On the other hand, reverse wholesaling involves finding a buyer first, before you go on to find a property for them. The outcome for both strategies happens to be the same, but the order and the process is somewhat reversed.
What Is Wholesaling?
In simple words real estate wholesaling can be defined as a way to generate real estate revenue without spending a lot of capital. Real estate wholesalers look around for distressed houses being sold for way less than their market value. Once they have a distressed house in mind, they sign a contract and sell it off to someone at a higher price, making way for their profit in between.
The icing on the cake with real estate wholesaling is that contrary to flipping properties, you don’t have to bear the renovation costs that go into renovating the house. You sell the house off in the exact same condition. The tricky part for real estate investors here is to locate an investor soon before the expiry date on their contract is reached. Once the expiry date passes by, the contract stands nullified.
What Is Reverse Wholesaling?
While finding the right property can be complex, most real estate wholesalers would agree that the most challenging part is to find a buyer who can afford the cost of the property and has the resources to pay the cash in the allotted time. Reverse wholesaling, hence prioritizes this and helps in finding the right buyer first, before negotiations are held on the property.
To speed the process up, reverse wholesalers are also in contact with the buyer so that they know exactly what they are looking for, and what they are willing to compromise for a good distressed home. It is necessary that you know all that the client is willing to compromise home, as you can find a home that has similar specifications. Reverse wholesaling can speed the process up and help in securing deals sooner than usual. This just makes the whole process easier to manage for agents and clients.
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