With housing inventory at record lows, you can make the case that off-market real estate has never been more important. Whether you’re a fix and flip or buy and hold investor struggling to find deals where the numbers make sense, or a first time homebuyer frustrated by how quickly homes are getting snapped up above list price, wholesale real estate can be the answer.
What is wholesale real estate?
Wholesale real estate is off-market real estate where a 3rd party “wholesaler” enters into a purchase and sale agreement with a seller with the intention of either assigning their role as buyer to a 3rd party for a fee, or quickly buying and re-selling the property to a 3rd party for a fee.
There are two types of wholesale real estate:
- Double closes
- Assignable contracts
Double closings are when the wholesaler enters into a purchase and sale agreement with the seller and actually purchases the property from the seller. The wholesaler then immediately sells the property to another buyer at a higher price.
Assignable contracts are when the wholesaler enters into a contract with the seller Assignable contracts are the most efficient method for wholesaling real estate because there is only one closing. This limits title work, transfer taxes and recordation fees.
Wholesale real estate deals:
If you’re trying to figure out how to find wholesale real estate deals, here are some options:
- Facebook: most local markets have Facebook groups dedicated to wholesale real estate
- OfferMarket: The wholesale real estate market is highly fragmented. OfferMarket is a marketplace for wholesale real estate. Wholesalers post their assignable contracts (“deals”) on OfferMarket for assignment to qualified buyers.
- Local REIA: join your Real Estate Investors Association and find out who the top wholesalers are.
You’ll want to join each wholesaler’s “buyers list” to be alerted about off-market deals.