14 Niches to make money in Real Estate!
Wholesale Property Flipping means simply to buy or put a home under contract to buy at a discounted price, and then quickly sell the property for a profit. The niches that follow can be applied to Single Family Residences, Multi-Family Properties, Vacant Land, Apartments and Commercial Properties.
Ways To Make Money With Wholesale Property Flipping! (Different Roles To Play)
1. Birddog/Property Scout. Your job is to locate and identify properties than can be successfully flipped for a profit. You can find these deals driving around your neighborhood, or maybe hearing about a property from a friend, family member or referral partner. Also some Wholesalers may need someone in a local market to take pictures, inspect the property or even show the property to a potential Cash Buyer. You can work out a fee for your time and service.
Caution: Make sure you have a well-written contract with those to whom you provide leads. You want to ensure you actually get paid, in full, for your efforts, i.e. $500-$5,000 per done deal or a showing fee.
2. Finance person: You are the “money guy/gal” who helps fund the deals. You can offer your funds as debt, equity or as a joint venture. You can also partner with a Hard Money or Private Money Lender for referrals. If you loan your own personal money be sure you protect your investment with a lien on the property you are financing or payments set up through an escrow company depending on the details of the deal.
3. Sales lead guru: Through yellow letters, bandit signs, social media campaigns, networking events, running craigslist ads, answering calls & emails from leads, chasing down FSBOs (For Sale By Owners), seeking out expired MLS listings, or “driving for dollars”: drive around and look for houses that are run down, empty, etc. You offer leads to the Wholesale Property Flipper and split the profits. See “Caution” above for advice on how to make sure you get paid for what you do.
4. Actual Wholesale Property Flipper: You follow up on the leads, create marketing campaigns for Absentee or Landlords, call on homeowners, put properties under contract, determine wholesale price and direct to seller buy price, find cash buyers for the properties etc. Here you wear (or coordinate) all the hats needed, from scouting out a deal to selling it to someone else. It helps if you have a mentor who can walk you through the first few deals. Check out Our Mentor Cash Now Homes
Wholesale Property Flipper Marketing Options
5. Buy, then quickly sell. You find a distressed property at a very attractive price. You put it under contract. Then you go find a cash buyer for the property and put them under contract. You Assign The Contract with your Assignment Fee or undertake a double close. These types of funding deals are, by their nature, very time-sensitive. Make sure you have the money to close the first (AB) escrow; then the second (BC) escrow closes almost immediately.
6. Sell, Then Buy. Also known as “reverse wholesaling”, here you switch around the equation: You find ready cash buyers and what THEY want to purchase, city, neighborhood, max price etc. Then you use your skills and resources to find the house that the buyer wants to purchase; put it under contract with the seller. Undertake a double close or assign the contract to the end buyer.
Who can you assign your contracts too?
7. Sell to retail buyers. Best accomplished with an already-identified, all-cash buyer who knows exactly what he/she wants, and can move on the deal in a matter of a few days. These are rare, but out there. NOTE: Make sure that the Home is in pristine shape and is in “move in” condition and that no remedial work of any type is required. These buyers might be using the property for a rental property or short-term rental like AirBnB or just have Cash Available and buying the home as their personal residence.
8. Co-wholesale. You will probably make less net money this way, since you are essentially “sharing” the profits with another wholesaler. But it can be a very good match since the deals can happen very quickly. If you have a property under contract, but don't have a buyer then partner with a wholesaler that does have a buyer. You can also let a Wholesaler know that you have a buyer for a property and ask if they will Partner or Joint Venture if you bring a Cash Buyer to the deal.
9. Sell to a rehabber: Similar to a co-wholesale. You have to make sure the rehabber knows exactly what they are doing, has ready cash lined up (hard money, private debt/equity, etc.) and can double close ASAP. The buyers will be holding the property,doing rehab then putting on the market in the MLS as a retail sale. These buyers will want to do an inspection and possibly have their contractor work up a bid for repairs before closing. Bonus Tip: You can refer these homes to your favorite Real Estate Agent for the listing when the rehab is complete. Use this relationship with the Agent to help with comps, new rehab listings or sell homes to the investors they work with.
Specialty Markets
10. Tired landlord. Eventually, even the heartiest of them get tired of the four Ts: tenants, toilets, trash and termites. The good news is that many of these rental properties are owned free and clear and already have a tenant in place. This brings up the possibility of seller financing, which can make the funding part of flipping the property a lot easier.
11. Code violations (AKA “red tag specials”). They can be very tricky, so be extra cautious. Some violations involve little more than fixing a broken pipe or replacing some broken windows. Others are so bad that the house needs to be scraped & rebuilt. How to find red tags: Government (health, safety) agencies often post lists of them online or view a list of them at city/county offices.
12. Insurance-related (fire damaged properties). These may or may not be “red-tagged”. Read local newspapers for the addresses of homes that recently burned. Sometimes they can be picked up for a song.
13. Probate leads: Roughly two million probate cases are filed in the US annually. Probate occurs when a person dies and their estate is disposed of via court action. Often a home is part of probate; there are sometimes bargain priced properties to be purchased. Check out probate leads at the courthouse. Probate attorneys are another audience to cultivate.
14. Obituary and death notices in the newspaper; follow up in a few weeks with the aggrieved spouse. Many of them cannot afford to stay in the house or may wish to move for any number of reasons.
-Hippotecca
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