A lot of people are attracted by the idea of becoming a real estate investor because of the large margins you can make.
Unlike the stock market, real estate is also a physical asset that still retains its intrinsic value even though it may fluctuate. If you’re just getting started, it’s best to stick with wholesaling.
Take Advantage Of Wholesaling In Miami.
To help you understand our reasoning, we’ve put this article together that offers four reasons explaining why you should explore wholesaling before looking at other real estate investment options in Miami.
Wholesaling doesn’t require you to get a mortgage loan, meaning you don’t need a credit check or tons of cash to become a wholesaler. You are effectively a middleman – someone who connects buyers and sellers with similar goals. This means you don’t need loads a capital since you’re not actually purchasing the real estate.
There will even be times when you don’t need any capital at all. Ultimately, you make money by finding and introducing investors to homeowners with real estate they wish to sell.
Wholesalers can make anywhere between $3,000 to $5,000 from a single transaction. Keep in mind this is with reduced investment risk while building all the other components of success – it’s a quick and easy way to build up your savings and jump into other avenues of real estate investing.
Real estate investing is often a team endeavor, especially at the beginning. The more people you know and network with, the more likely you’ll hear about opportunities as and when they arise. As you compile a list of buyers and sellers in wholesaling, you’re also building contacts and a positive reputation for yourself in the industry.
That’s why it’s imperative that you dedicate time to becoming a good, reliable wholesaler who establishes solid business relationships.
When you’re ready to take action and make a larger investment, you’ve got the advantage of already being in a strong position with access to potential partners who you can work with. Not only does this help you purchase properties, but their resources will also aid in rehabbing and later flipping the property with potential buyers in your network.
Gaining Market Savvy
Investors need to have a good understanding of the risk involved, no matter the investment. But when you wholesale, your role is to bring buyers and sellers together. You’re not actually the one investing, which means you’re taking on far less risk than the actual investor.
This is where rookie wholesalers slip up. They don’t see the risk involved as a problem because they’re not the ones taking it. But, if you commit to wholesaling and work closely with both buyers and sellers, you can develop a better understanding of where a property starts and when the risk involved is considered too great.
It also helps you understand bigger market scenarios where slow markets make it easier for investors to negotiate better deals on distressed homes. You’ll also see which properties an investor chooses to rehab and which he/she chooses to hold and rent out until market conditions improve. This strategy helps investors recoup the cost, obtain tax benefits, and build equity in the property until they can sell for the desired profit.
Your Day Job
Few real estate investors start full time. While hundreds of thousands of dollars in profits is an appealing career path, it’s also intimidating. However, learning about real estate investing in a practical way is far better than just reading books.
For hands-on practical experience, wholesaling is a great place to start. You get to meet people, build contacts, and gain the industry knowledge without putting your own mortgage on the line.
At first, it’s a good idea to keep your day job. Don’t make any rash financial risks and only work on wholesaling deals at night and on the weekends. It’s entirely possible to find great opportunities without putting your finances at risk.
Once you’ve mastered the art of wholesaling, you’ll be in a much better place to take the next step and invest in distressed properties yourself. You’ll know how to turn an investment into a success and become a better negotiator, gaining even more expertise and experience when it’s your money you’re investing.