In the single-family residential market, you have undoubtedly heard of wholesaling. Naturally, this might conjure up thoughts of houses sitting on tall shelves in warehouses. What exactly is wholesale real estate anyways?
1. Wholesaling is a short-term strategy that an investor can realize benefits from quickly.
2. It does not require a large pool of capital to get started in wholesaling.
3. Wholesaling can be used to get direct experience in many aspects of real estate investing.
4. Since wholesaling focuses on acquiring real estate and quick disposition, investors can cycle through more deals quicker.
1. By selling the properties without holding them, wholesalers short-circuit one of the best ways to build wealth in real estate.
2. To be successful, a wholesaler must accurately determine the ARV and estimate rehab costs to determine a property's value. That can be very challenging for a new investor.
Sometimes wholesaling is viewed as an entry-level real estate investing option. That is because it does not take a lot of capital to get into wholesaling. At the minimum level, the only requirement is to get out to potential sellers and get the property under contract.