Wholesaling houses can be a lucrative source of income if you have the skills to find properties and sell them with a good margin. After all, you’re not buying the property itself at any stage during the process, so you can make thousands of dollars just for acting as the middleman between the seller and the end buyer. Many people want to run the numbers on how much money they could make before getting into it, and that’s a fair question to ask. This article is all about that. Read on to find out how much you can make by wholesaling real estate.
How Do Real Estate Wholesalers Make Money?
Real estate wholesalers make money by acting as middlemen between sellers and end buyers. Unlike flippers, though, wholesalers never actually buy the property. First, they find a property owner who is ready to sell the property under market value. They then put the house under contract, making sure to include an assignee clause. This means that the wholesaler can sell and transfer – “assign” – the contract to another party – the end buyer. Money is made on the markup between the seller’s price and what the end buyer is willing to pay for the property. It’s as simple as that.
How Much Money Can a Real Estate Wholesaler Make Per Deal?
How much money you can make per deal when wholesaling houses comes down to a few main factors. The first is how much under-market value you can get the property from the seller for. Negotiating a seller down from $200,000 to $195,000 on a house that you then wholesale for $205,000 will obviously allow you to make more money.
The second factor is how good you are at finding interested buyers and negotiating a price with them. The more interested buyers you have, the more options you have. A lot depends on your sales skills. The third factor is what costs you can get the other parties to cover. Closing fees, documentation, cosmetic repairs – if you can get the buyer or seller to cover these, your profit margin will obviously be larger.
In general, wholesalers can expect to make anywhere from a couple of thousand dollars to $15,000 or even more on a deal. There are many different variables at play.
How Much Can I Make Per Month Wholesaling Real Estate?
Your first months of real estate wholesaling will almost certainly be slow and not very profitable. That’s because it takes time to find undervalued properties for sale, build networks of potential buyers, negotiate and close deals, and so on. How much you can make per month also depends on whether you’re wholesaling as a full-time job or doing it on the side for extra income. There really isn’t a number you can expect to make per month. Still, with effort and a little bit of luck, you could make at least several thousand dollars on average per month.
To consistently earn more than $10,000 a month wholesaling, you’ll probably need to have a system with a working “pipeline” of potential deals. As undervalued real estate properties are, by definition, outliers on the market, you’ll need to hustle to find these good deals and wholesale them.
How Much Does the Average Real Estate Wholesaler Make?
It’s hard to say what an average real estate wholesaler makes because a lot depends on what your definition of an “average” wholesaler is. Is it someone for whom wholesaling houses is a full-time job? Is it someone who wholesales real estate in addition to their day job? Is it someone that dabbles in it on the side? More importantly, what would it be for you?
A wholesaler that does two deals a month on average, with the profit being $2500 per deal on average, will be making $60,000 per year. In another case, a wholesaler that does two deals, with an average profit of $4000 per deal, will be making $96,000 a year. In some cases, individuals who have a good system in place and partner with like-minded individuals can earn upwards of $52,000 in a single month.
Can You Get Rich Wholesaling Real Estate?
When wholesaling real estate, as with many other sales-centered professions, the amount of time and effort you put in will be reflected in how much you earn. You can certainly build yourself a financially comfortable life wholesaling real estate. Many start with wholesaling real estate but move on to potentially more lucrative activities, such as rehabbing and flipping, when they’ve accrued a decent amount of capital. Others stick to wholesaling. After all, you don’t need to tie up a large amount of your own money in the deal, so wholesaling can allow you more financial liquidity. As for “getting rich,” you have to define what that means for you. To become a multimillionaire from wholesaling real estate, you’ll need to build a proper business. In the world of real estate, though, anything is possible.