Wholesaling – which is really nothing more than buying or selling a lower price because of a large volume of product involved – is a practice engaged in by tens of thousands of businesses in all kinds of industries. But wholesaling usually doesn’t come to mind when we think about real estate transactions. Still, it makes up an important part of the real estate investing arena. So what are the benefits of buying through a property wholesaler?
Ease and Convenience of Wholesaler Specialization
Without a doubt, we live in an era of specialization, especially with respect to business. And this allows each of to do what we do well and to leave the rest of it to those who have that peculiar specialized expertise. When it comes to marketing, negotiating, and contracts, real estate wholesalers have the specialized knowledge and expertise that most investors probably don’t. That, in turn, means that you can concentrate on running your investment business and let the wholesaler deal with those other matters.
A related advantage of buying through a property wholesaler is that the whole thing is easier and more convenient. Repeatedly tying up properties on a volume basis requires skill, experience, and quite a bit of perseverance. Again, though, because a wholesaler possesses this specialized knowledge and skill, you have the convenience of letting her market, make offers, negotiate, and tie up properties while you focus on rehabbing and managing projects. You won’t be pulled in many competing directions, and you won’t have to attempt what you don’t have the knowledge or skill to pull off properly.
Retail sales and wholesale transactions are markedly different. In that difference lies one of the chief benefits of buying through a property wholesaler – a considerably streamlined process.
Acquiring retail properties for investment purposes entails a lengthy process – form three months to a year till closing – with reams of contracts and other documents, inspections and appraisals, financing, and finally closing. A wholesale transaction, on the other hand, is much less complex and involved and far more streamlined. For example, if there is any inspection at all, it will just be an abbreviated version of the one required for a retail sale. And, best of all, closing can take place in as short a time as one week. Just be aware that this streamlined process will require you to exercise some due diligence, but for investment properties simpler and quicker are usually better.
Opportunity for Reduced-Risk Experience
If you’re new to buying investment real estate, wouldn’t you want to take advantage of a learning opportunity that carries little risk? And this may the best benefits of buying through a property wholesaler.
A wholesale transaction presents the opportunity to gain experience with decreased risk primarily because the purchase is often far below what it would be for a similar property in a retail sale. So if something goes wrong with a particular wholesale property, you won’t lose your shirt, and you can recoup losses elsewhere. You can also build your real estate business incrementally and step by step as you are financially able without the need for a ton of operating capital at the beginning and without the potential for enormous losses. Basically, you have the opportunity to learn as you earn.
Whether you’re a brand-new or an experienced real estate investor, the benefits of buying through a property wholesaler are many and significant. You just need to determine what is best for your particular situation and your business model. So if you’re wondering whether it’s right for you, we can help.