Why Does Everyone Want to Become a Wholesaler? – Part One

Posted on July 6, 2015 by

I have noticed over the past months that almost everyone I talk to today tell me they want to be a wholesaler. These people want to wholesale deals as a way to generate fast money to pay their living expenses each month. What in the world is going on here? Why is it that all of a sudden everyone wants to become a wholesaler when there are so many other different ways to profit from real estate other than wholesaling?

Don’t get me wrong I’m not suggesting that wholesaling isn’t a great way to get started as a real estate investor. All I am suggesting is wholesaling is only one way to make money buying real estate but it’s not necessarily the best way in my opinion. Having done many wholesale deals over the years I have come to the conclusion that if the only way you buy real estate is wholesaling where the investor either buys or gets the property under contract with the seller and then resells the property to another person or assigns their assignable purchase agreement to another investor and passes along the deal you structured with the seller for a fee.

It took me years to finally figure out that wholesaling is a great way to quickly bring in money in $3,000 to $10,000 increments to help me pay my living expenses. I also have determined that if all I was doing is wholesale I had a job. What do I mean? If all you do is wholesale property you also have a job. Yes, you are buying real estate and yes, you are making money but when you wholesale a deal and you get your assignment or profit check you use the money to pay your living expenses and almost immediately the money is gone and you then have to go out and find another deal and repeat the process, over-and-over to keep you in money to pay your bills. I found this is very similar to having a job. I don’t want a job, I left the pipefitting trade after 30 years because I didn’t want a job. I wanted to be free to do what I want, when I want, without worry of the cost and I figured out that creating wealth wholesaling deals just wasn’t going to get me where I wanted to go and you probably won’t either.

One of the biggest problems I see investors make who wholesale properties is they pay too much for the property they plan to wholesale and because of that most seasoned investors simply won’t buy those properties because for the seasoned investor making a profit is a must and when a wholesaler pays too much for a property and then asks for a large fee on top of the price they agreed to pay just won’t work for most seasoned investors.

The best advice I can pass along to anyone just getting started as a real estate investor who has decided to be a wholesaler is, do the numbers of every deal as though you were going to buy the property yourself with the same margins of potential profit you would want. After determining what you would be willing to buy the property for yourself with the margin of profit you would be willing to accept then deduct the amount you want as your assignment fee, if you are assigning the assignable purchase agreement from what you would be willing to buy the property for yourself and ask the investor you are trying to pitch the property to.

I know you are thinking what I just said was ridiculous because it will be hard to buy any property for that low of a price. This is not true. All I know from my own personal experience is when I didn’t follow the advice I just gave you I found it hard to find an investor who would want my deals. Other investors also want a good deal where they can make a profit.

Next month I will continue to explain what I believe is more and different ways to make money investing in real estate including wholesaling but doing it so other investors will constantly be calling you for more deals.

Until next month, Happy Investing

Larry

Larry HarboltLarry Harbolt is the nation’s leading Creative Seller Financing expert as well as a popular national real estate speaker and teacher whose time-tested strategies and nuts and bolts teaching style has helped thousands of aspiring real estate entrepreneurs realize their financial dreams with little or no money and without the need for credit. Larry has been successful creatively buying and selling real estate for over 30 years and has written numerous popular articles and real estate courses. Larry also has been running a meetup group for real estate investors in St Petersburg, Florida for over 13 years. Larry is the real deal!

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