Of all the ways to make money in real estate investing, wholesale and honestly is one of my favorites, personally. It’s the strategy we used to avoid financial disaster in 2001, when the events of 9/11 caused my aviation business to collapse.

Wholesaling is when you gain control of a property and assign your interests to another investor at a marked price. And if it seems like I’ve chosen my words very carefully, you’re right!

Two things you MUST know before proceeding:

1 – It is a well-established principle of contract law that ANY party can assign a contract, unless the contract itself says otherwise. There is a lot of confusion in the market about this; Often the source of the confusion is well-intentioned, but real estate agents and brokers are misinformed. Again, YOU MAY assign any contract (assuming you are a valid part of the contract) unless the contract says otherwise;

2 – Anyone can sell their property without a real estate license. Ok, so what is property? Property is anything tangible in which you have any ownership interest, including a fully ratified contract of sale.

Ok, so before I get in trouble for practicing law, understand this, what I just said, and I will continue to emphasize, is that it is about BUSINESS Advice, specifically in the area of ​​real estate investment. NOT legal advice. If there is anything I have written that is confusing, or if you are not quite sure, you should talk to YOUR attorney and get his or her approval before proceeding.

And since everyone has a “prepaid” legal attorney, or attorney available to them, then this won’t be a problem. Folks, Dudettes, if you’re investing in something, or if you live in the US, you need a lawyer. Someone to look over their shoulder. If you refuse to have a team of advisers, including a lawyer, you really need to turn off the computer right now and go back to rewatching Gilligan’s Island because you’ll never get rich with a DIY (not yourself) mentality.

We continue…

So selling wholesale is the act of obtaining property under agreement (contract, letter of intent, memorandum of understanding) and then assigning your interests to another investor. This is the theory, for the actual mechanics of how it works you will spend a little more time than just reading a blog post. Something to ask now when you attend the next REIA meeting or the National Conference of Real Estate Investors.

Wholesale is great because it works in ANY market.

When you have low interest rates, as we’ve seen in the last three years, and most of the “end buyers” are rehabbers and first-time homeowners, you can sell them wholesale. And when you enter a higher interest rate environment (like now) and “buy/hold” investors start to return to the market, you can wholesale your deals to this group.

However, what I like most about Wholesale is that it GIVES YOU AN EXCUSE! That is an excuse to meet more experienced investors. How? By accepting wholesale deals with them and in exchange for doing so, you get to know what they know.

Unfortunately, there is not enough space here to go into all the details of advanced wholesale strategies, but I will come back to this in future posts. What I want to touch on now is the need to stop confusing Wholesale with “Flipping”: they are not the same. Or, more accurately, they don’t mean the same thing in all circles.

The term “Flipping” comes from the world of commercial real estate, where wholesale deals happen ALL THE TIME.

On any given day in Washington, DC, or Baltimore, or any major city in the United States, smart and astute investors are putting small pieces of property up for contract (and making millions) with no interest in closing the deals themselves. These street-savvy investors intend to take their contracts and assign them to investment groups with much deeper pockets that are in the process of “assembling” a city block to build a huge office building.

Larger investors often encourage smaller investors to do this because if the property owner really knew that XYZ Corp wants their property, the price would quadruple. A few years ago, the term “flip” crept into the language of people who do single-family businesses. “Flipping” originally meant “flipping” the contract.

However, nowadays “Flipping” means many things, including “going to jail”. HEY???

Yes, in 2003, the Federal Government (HUD) issued a ruling that broadly described “Flipping” as illegal. This ruling has to do with collusion and other bad things that resulted in several mortgages (which were government insured) going into default. This HUD decision has absolutely NOTHING to do with wholesale, but most people don’t care about the details. They hear the words “illegal” and “flip” in the same sentence and go no further.

In addition to the HUD ruling, HGTV began producing a television show called “…Flipping…”. Once again, this show has nothing to do with wholesale. On the HGTV show (which is a knockoff of a British show called Property Ladder), contestants buy, rehab, and then sell houses. If you’ve ever watched this show, you’ll know that it’s probably something you never want to do, unless you want to empty your savings account and end up in divorce court.

Unfortunately, whether it’s a federal ruling or a television show, the term “Flipping” has come to mean different things to different people. So it’s probably best not to use the term at all.

Wholesale will make you money. Flipping may or may not cause you problems, depending on the type of flipping you’re doing.

Once again, in a future article (after I discuss the other strategies) we will come back and discuss the various ways to make money selling wholesale. For now, understand this: wholesale works in ALL real estate markets, regardless of interest rates or the economy.

RELATED ARTICLES

천골의 긴장을 완화하는 데 마사지가 도움이 될 수 있습니까?

데 마사지가 도움이 될 수 있습니까 환자가 천골의 긴장을 가지고 마사지 테이블에 올 때, 그 부위 주변의 근육을 풀어 불편함을 완화시키는 것이 세션의 목표입니다. 또한 치료사는 SI 관절이 자연스러운 정렬을 유지하도록 돕기 위해 골반과 척추를 움직이는 근육의 균형을 맞추기 위해 노력할 수 있습니다. 천장관절(SI) 관절은…

휴대폰의 진화 – 기술 여정

기술 여정 비대면 전화 기술은 적외선 신호를 사용하여 Motorola DynaTAC에서 다른 단말기로 첫 번째 통화가 이루어진 이후 많은 발전을 이루었습니다. 한 휴대폰에서 다른 휴대폰으로, 심지어 자동차에서도 통신할 수 있는 능력은 이제 당연한 것으로 여겨지지만, 실제로 이러한 기능을 차별화하는 것은 스마트폰에서 액세스할 수 있는 애플리케이션입니다. 피트니스…

Leave a Reply

Your email address will not be published. Required fields are marked *