property for below market price, and then selling it to
another investor, usually without fixing up the property
it’s a procedure also sometimes described as "flipping
properties".
Buying and selling wholesale real estate property can be
difficult and challenging as sellers are instinctively
inclined to sell their property for more if they realize you
are a wholesale investor.
Whereas the deal itself can sometimes be difficult, finding
properties to resell at a profit is relatively easy if you
know where to look. Many people who sell properties at
wholesale prices are what might be called motivated sellers
- those who are desperately trying to sell for a compelling
reason. These reasons can include foreclosure, relocation or
personal or health issues.
There are several methods of finding suitable properties
that can potentially be wholesaled. Some of the best
wholesale deals can be obtained from a county or city that
has taken over a property, often for failure to pay taxes a
procedure known in the industry as "landbanking".
Concentrate on looking for foreclosures. Apart from lists
provided by banks and other lenders, you can also locate
foreclosures by reading the notices issued by the city or
county and posted in the legal sections of business journals
and local newspapers.
Some properties are available to purchase when the city or
county has "red-tagged" them, meaning that the house is
unfit for human habitation because of a safety or health
issue.
Look for newspaper advertisements that state that the
advertiser buys properties. "We buy Houses" is often a
giveaway. These are usually ads that have been placed by
fellow investors and there is nothing to stop you calling
them and asking for their list of properties.
Networking is important when it comes to locating and buying
wholesale properties. If local realtors are aware that you
are interested in potential wholesale deals, you will find
it a lot easier to find properties. A good network of useful
contacts is invaluable and one of the best things you can
have in real estate. Make sure you always follow up with
your contacts rather than waiting for them to call you back.
And sometimes the simple approach is effective - many
successful investors advise that you can do worse than
simply drive around respectable neighborhoods and look for
slightly run down houses that are for sale.
Many people who are trying to locate wholesale properties
make the understandable mistake of concentrating on the
cheapest properties in their area. In fact, a profit can be
made from wholesaling more expensive homes as there are
usually homeowners who are desperate to sell their more
expensive home, too.
Wholesaling has been around for a while, but in recent years
it has become more widespread and acceptable and contrary to
what some people believe, it is perfectly legal. And with
the right knowledge, foresight and connections it can be a
profitable venture.
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