Buying Real Estate Wholesale

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Everyone likes a bargain, and that includes us. But in real estate, as in other realms of bargain hunting, bargains are usually in the eye of the beholder. To one person, a run-down property with broken windows and a serious mold problem is a disaster. To another, it is an ugly duckling waiting to be turned into a swan. As you get deeper and deeper into real estate investment, you’ll hear the phrase “buying wholesale” more and more often.

It’s a phrase borrowed from the world of selling goods, where there’s a retail level (the store) and a wholesale level (the company or distributor that sells to the store).In real estate, though, the term wholesale gets a little complicated. In an earlier chapter, we talked about buying a property that had just doubled in price, and yet we were able to sell it in less than a year at double the price again.

Did that mean that we “bought wholesale”? Or were we “retail” customers until the day we sold the property? Additionally, investors often experience sudden changes in their circumstances. A good buy on a property that they planned to fix up can become a problem property for them overnight if the cash they need to fix it up is no longer available. Or maybe a better deal comes along that they don’t want to miss out on, and they need to get their cash out of the property they already own.

One really great thing about real estate is that good deals tend to bring you more good deals, and when that starts to happen, you just can’t buy everything. So keep your eyes on the other guy’s fortunes, good and bad. If he needs to make a quick reshuffle of the deck, this may create good opportunities for you. The third broad category of direct sellers is the “pure” FSBOs.

Conclusion

These are simply property owners (usually owners of single-family homes) who have decided to sell their property themselves to save on the commission. You can find these people advertising their property for sale in the newspapers or by spotting their signs when you drive the neighborhoods you work as an investor.

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