Investors – Are You In The Buy And Flip Market?


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Investing in real estate can take several forms.  While some investors invest their money in companies like Real Estate Investment Trusts that do all the work for them, others would rather be directly involved in the buying and selling process themselves.  Among the ranks of such do it yourself investors are those that invest solely in wholesale properties.  Investors who invest in wholesale properties, also called buy and flip properties, purchase real estate for the purpose of immediately selling it. Wholesale investors usually sell to retail investors, who after fixing them up; sell them to the end buyer for a profit.

Of course, in order to make a profit buying and flipping real estate, the price paid to acquire and fix up a piece of property must be lower than price at which it eventually sells.  Since wholesale investors usually sell to other investors who do the renovation and final sale to the end user, the property in question has to be bought at a reasonable discount which makes enough room for the wholesaler and retailer’s expected profits.  If the property is expected to sell at its market value after rehabbing, then the price of obtaining plus cost of rehab must fall comfortably under the market value.

Obviously, a wholesale property investor is best served by looking for homes that sell at discounts.  To find such homes, they may need to search listings for sellers who are in danger of facing foreclosure, like short sale and cash sale sellers.  Sellers who fall in this category are usually termed desperate sellers and would sell their homes for considerable discounts.  Other sellers who may be willing to sell at discounts include families moving out of town and recently divorced couples.  Already foreclosed homes would also typically sell at discounts.  Investors could look out for houses bearing signs such as “foreclosed” or “bank owned” either on lawn posts, on online listings, or newspaper listings.  They can also attend bank auctions to buy foreclosed property.

Finding rehab investors is the next challenge after buying a good house for a great discount.  Avoiding overpricing is the key thing to keep in mind.   The wholesale investor must remember that the retailer is also in it to make money and expects to buy below market value.  A very efficient way of doing business would be to partner up with trusted individuals specialized in rehabbing and agree on a fair profit splitting formula.

In today’s current market climate where there is an abundance of distressed real estate, investing in wholesale properties might be a very profitable model if the right steps are taken.  Investors who engage themselves in the business must be extremely knowledgeable about the market, in their bid to find the most sellable houses for the best discounts possible.  When buying, they should keep their offers well below the expected price at which the property will sell to ensure themselves and their retail partners, reasonable profit margins.

Asking questions with these few tips in mind will help save real estate investors thousands. For more ideas related to real estate investing, call or visit us a Homevestorsfranchise.com. We are the nation’s number one home buying franchise with over 15 years of experience. Our company has a vast assortment of real estate investment and real estate franchise opportunities available to help you grow your real estate business. Come see us for more information.

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