I put together some cool videos this month on how to get started in house flipping in 2016. Here’s one about real estate wholesaling:
What is Wholesaling?
Wholesaling is just connecting the dots between sellers & buyers and getting paid for it (kind of like a finders fee). And when you do it legally, you can make a lot of money/
So check out this story to help you get it:
Don is a wholesaler.
He spends his time searching for real estate deals. So one day, Don gets a call from Jan. Jan wants to sell her house, and needs to do so quickly. She tells Don that her house needs rehabbed, and she wants to get rid of it because she doesn’t want to put money into fixing it up on her own.
Don views the house and offers her $75k for it. Jan accepts and they sign a contract. The contract states that Don or anyone else he assigns the contract to will buy the home for $75k.
Then Don gives Gene a call. Gene is a house flipper who Don knows. So he talks to Gene about the house and what it needs as far as fixing it up goes, and what it’s worth after it’s rehabbed (aka the ARV):
So Don offers to sell the property to Gene for $80K.
Gene can fix it up and still make money at that price (because he knows the A.R.V.). So, Don and Gene sign an “assignment contract” which legally means that Don is signing the house over to Gene after he buys it. Don can do this because he already signed a contract with Jan saying that either Don or someone else will buy the home.
Don drives to the title company, with Gene and Jan, and Gene pays Jan $75k for her house with Don keeping the extra $5,000 difference as his wholesale fee.
Do you see how you can make money here?!
Don didn’t own the house for one day but he made $5k because he connected Jan (the motivated seller) with Gene (the house flipper).
So go and do likewise!