What Is a Real Estate Wholesaler?

Home prices are already high but are forecasted to rise 11% more in 2022. If you want to make money in real estate, this could be a good time to do it.

One of the top ways to get involved with real estate is to become a real estate wholesaler. Wholesaling real estate allows you to make money in the industry with low investment and a minimal barrier to entry.

So what is a real estate wholesaler? In this real estate guide, we’re going to tell you everything you need to know.

What Is a Real Estate Wholesaler?

Real estate wholesaling is a real estate strategy in which a wholesaler creates a contract with a seller and sells a property on their behalf. This is usually done for distressed and as-is properties. The wholesaler then sells the home to a different buyer and keeps the profit.

As part of the deal, the wholesaler will sign a contract and agree to sell the home at a guaranteed minimum amount. The wholesaler will work to sell the home for more than this price and will then keep the profit.

As a critical part of this, a wholesaler will typically add a contingency clause. This will help ensure that the wholesaler can back out if they’re not able to find a buyer by the closing date that’s expected. 

Benefits of Wholesaling

While there are many types of real estate strategies, wholesaling offers some unique benefits that make it worth considering.

One of the best things about wholesaling is that you need very little to start. When wholesaling, you’ll simply be selling someone else’s property for them and you won’t actually need to buy the property yourself. You’ll need a minimal investment upfront to get started.

Overall, wholesaling is a great way to get started in real estate and make some money in a short time frame. 

Drawbacks to Wholesaling

On the other hand, there are some drawbacks to wholesaling in real estate as well.

It’s important to realize that there’s a lot of unpredictability in wholesaling and you may not be able to sell a home that you take on. You’ll also need to find a buyer within a short time frame.

On top of this, it can be tricky to find sellers willing to work with a wholesaler in the first place. You’ll need to do a lot of work to build relationships in real estate. Keep in mind, however, that using real estate crm software can help make this easier.

Another drawback is that this real estate strategy tends to offer lower profit margins on average than other real estate strategies.

Deciding Whether You Should Become a Real Estate Wholesaler

So what is a real estate wholesaler and should you become one? By now you should have an idea of whether or not this real estate career is right for you. If you want to get started with wholesaling, be sure to do it wisely and ensure that you understand the pros and cons of doing so.

Need more helpful real estate tips and advice? Browse our blog now to find more real estate guides and articles.

Vivek is a published author of Meidilight and a cofounder of Zestful Outreach Agency. He is passionate about helping webmaster to rank their keywords through good-quality website backlinks. In his spare time, he loves to swim and cycle. You can find him on Twitter and Linkedin.