Overview of Wholesale Real Estate Investing & Purchase Strategies This is an extremely large and comprehensive topic, that couldn't possibly be covered in the few pages devoted here, but hopefully you'll be able to use this as a launching point for ideas, direction, and doing some of your own research.
Let's start by differentiating between buying real estate from a wholesaler, and buying real estate at "wholesale" or deeply discounted prices yourself, without paying a middleman's fee to the wholesaler. Buying real estate from a wholesaler is infinitely easier, but will, of course, mean paying a lot more than being the wholesaler yourself.
Option 1: Buying from a Wholesaler
This is NOT a comprehensive subject, as any brand-new real estate investor can find real estate wholesalers easily enough and buy from them. There are other tricks, however, such as avoiding being taken for a ride, which we'll spend slightly more time talking about.
You've no doubt seen countless "We Buy Houses" signs all over your home town, so start jotting down phone numbers as you pass the signs. You'll quickly compile a list of wholesalers, who will be more than happy to provide you with list of their current inventory. For even more wholesalers, call up a few local hard money lenders, and ask them for some names and numbers of wholesalers they work with; many hard money lenders are even wholesalers themselves. Be sure to ask for instructions on seeing the properties, as many wholesalers are too lazy to try and close deals in person, and will simply give you key box combinations for their properties.
You should now have a half dozen lists in front of you, with addresses, prices, and property conditions listed. Since you've already picked out a few target investing neighborhoods, you can simply go through and highlight the properties in those neighborhoods, and take a look at these properties in person. Hopefully the wholesaler gave you the key box combination over the phone, so you can simply walk through the neighborhood and see all the different properties at one visit.
Wholesalers WILL try to rake you over the coals on pricing. They will tell you that they're doing you a favor at that price, they'll tell you that they can't afford to sell it for less, that their children need to eat, and every other dried-up sales line in the book. DON'T BUY A WORD OF IT. They make their money buying from distressed sellers forced to sell at a disadvantage, and then they turn around and "do you a favor" by marking the price up by $20,000. If you're not buying for at least 25% less than the same property would sell for on the MLS, don't buy. Negotiate aggressively, push as hard as you possibly can, and if you don't feel like you're getting an absolute steal, don't buy.
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