Once you’ve created your investor list (which we will discuss) it won’t be hard so that you can move these deals in a short timeframe, within 10 to 15 times normally. Your buyers will be paying with All Cash and financing is not an issue. This is easier than selling to an “End Buyer”. Within a slower MARKET, it may literally take two to three months that you can find a professional buyer who wants to buy the property.
Remember that the keyword here is “QUALIFIED BUYER”. When you’re working with other traders you know that they either have cash or hard money, and financing isn’t a big issue. When you’re coping with “Joe Q. Public” you’ll get interested buyers with various financing issues and you’re the one that has to be concerned about getting the deal closed.
That brings me to another reason why I favor wholesaling real estate over rehabbing. When you get, fix and resell real estate, you’re focused on the property. THE NICE And The Bad! If some unforeseen problem arises (It always will), you’re going to be the one that carries the expense. If you’re rehabbing a property, you’ve got to start by hiring a contractor or handyman. You’ve got to get him to do all the fixes to the house, market the house, feel the process with the final end buyer. All this may take a long time, and you are the one carrying the costs.
Every day that property remains in your possession, money is pouring out of your finances. In a low cost deal, all that you will be doing gets control of the house really. You would simply take the same property that you would buy and rehab normally, and get it under contract. Then, you’re taking that contract, marketing it and selling it to other traders that want to take on the project.
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There are investors out there that prefer doing rehabs. They are investors who have the cash to pay and who don’t brain waiting six months to do a rehab. You will find traders that want to do a deal also, but are terrible at speaking with sellers and would not be able to secure the pricing that you can.
The Rehabber will generally net greater than a wholesaler, but look back at all of the time and risk associated with doing a rehab. 40,000.00. and sometimes even more. 20,000.00. As you get better at negotiating, you’ll be getting properties under contract for less and less, letting you sell the contract for more and more.