Many are attracted to becoming a real estate investor because of the large margins you can make. Unlike the stock market, real estate is a physical asset, that while it may fluctuate, it retains intrinsic value.
Wholesaling is a great way to get started in real estate. It is one of the most common paths people start with when getting into real estate investing. However, many investors try to quickly graduate from wholesaling before they are ready or it makes sense. So, in today’s post we are going to cover 4 reasons why you should stick with wholesaling.
Cost Effective Introduction
You can start wholesaling real estate today without having a ton of cash in the bank. While most real estate strategies will require you to have a considerable amount of cash on hand to complete the purchase wholesaling doesn’t require that you actually ever purchase the property and therefore can be done with much less capital.
Wholesalers can make anywhere from $3,000 to $5,000 from a transaction. Keep in mind this is with reduced investment risk while building all the other components of success. This is a quick and easy way to build your savings to be able to jump into other avenues of real estate investment.
Relationship Building
Real estate investing is often a team endeavor, especially as you begin. The more people you know and network with, the more you have your pulse on the local opportunities. As you build a list of buyers and sellers in wholesaling, you are building your reputation for understanding the good value and business savvy.
When you’re ready to step up and make a larger investment, you already have a group of potential partners who have access to capital you may not. Not only does this help in the purchase of properties, but their resources will also aid in rehabbing and later flipping the property with potential buyers already in your network. Spending time becoming a good wholesaler establishes solid business relationships.
Gaining Market Savvy
Being a good real estate investor means being able to consistently find good properties at great prices. As a wholesaler you will learn the values across your local market and even more importantly how to find great deals. Developing the deal finding skills of a successful wholesaler will help you be successful in more advanced strategies down the road. However, before you try stepping up to the next level of investing you want to be sure you’ve mastered your current level. Take the time to build the skills and strategy that will product consistent deal flow for your business before moving on.
Your Day Job
Few real estate investors start off doing it full time. While the lure of hundreds of thousands of dollars in profits is enticing, it is also intimidating. Learning about real estate investing in a practical way is much better than just reading books.
Wholesaling allows you to get this practical experience, meet the right people and not put your own mortgage on the line. Keep your day job, thus your steady income and work real estate wholesaling deals at night and on weekends. You can still find great opportunities without putting your entire financial future at risk.
Once you have mastered the art of wholesaling, you are better prepared to make your own investments in distressed properties, rehab them and flip them for profit. You’ll know the timelines for success and become a better negotiator when the dollars are bigger and your own