Looking for potential property investments can be time consuming. Finding the right investment opportunity can be even more taxing. Learning another investor beat you to the deal you just found can be described in one word -- faceplant.
Instead of searching and negotiating deals with various homeowners or realtors, many property investors and rehabbers look to property wholesalers for some of the best opportunities. Why?
No. 1: convenience. Wholesalers are experts in finding the best real estate deals. Add to this that they know the ins and outs of contracting, and they can lead you to more investment opportunities.
How Do I Make a Wholesale Opportunity Work for Me?
Find a wholesaler who understands your real estate investment strategies and goals.
Your wholesaler can then be presenting you deals as they are found. Understand how a property wholesale deal works and use these 5 tips to make the best investments:
5 Tips to Getting the Most Profitable Wholesale Deals
- Watch wholesale listings. These properties move fast. Get on a real estate wholesale e-list to be notified of new listings.
- Do your homework. Know how to accurately estimate an ARV (after repair value). Know the comps, or what the comparable homes sold for in the area. Know what interior features they have, such as granite countertops, walk-in closets, a pool, etc., so you can quickly and accurately determine profitability when a wholesale deal is presented.
- Be able to quickly and accurately estimate repair costs. That means within 15 minutes, advises Jeff Johnson, a real estate investor and director of lending at Catalyst Funding. Why? A deal of a lifetime means other property investors are lurking. Have a form, app or property investment checklist on hand so you can be calculating on site.
- Account for contingencies. When visiting the property, turn on the water in every room and allow to run for a few minutes to check for water pressure or plumbing issues. Turn on lights, inspect the foundation, look at the roof. For any suspected major repairs, plan for 50% of the potential maximum cost to help ensure you are covered when it’s time to get behind the walls and under the roof to actually see what work needs done.
- Be prepared to move fast. You’ll likely need to issue a non-refundable earnest check. Therefore, know your budget and have your financing pre-approved so you can confidently move fast and smart.
Many property investors prefer hard money over private money or cash as it is designed to be fast and easy. Remember those other lurking property investors? They’re already looking in the windows.
Don’t wait to get started working with a real estate wholesaler today.
Catalyst Funding is a hard money lender located in Houston, Texas. As active real estate investors ourselves, we also have wholesale properties available through our parent company, Saxum Real Estate.
For more information on our wholesale properties and hard money loans, contact Catalyst today. 832.648.3626