Real estate investors can spend countless hours digging through individual real estate listings to find a property worthy of their investment. The Multiple Listing Services (MLS) can help, but it still takes a lot of time, effort, and energy to find the right property that’s worth your investment dollars. Besides, many of the best investment properties are off market, and aren’t listed on the MLS.
Luckily, if you don’t have the contacts, or you’re not interested in doing the research to find and buy profitable real estate investments, there’s a straightforward solution that can help.
What is a Real Estate Wholesaler?
In industries outside of real estate, the role of a wholesaler is fairly simple. Wholesalers buy products and resell them to retailers at a below-retail price. Wholesalers simplify the work for retailers, by doing the research, finding and purchasing the products, and dealing with all the associated problems.
Real estate wholesaling isn’t substantially different from wholesaling in any other industry.
A good real estate wholesaler researches and finds outstanding real estate investments that he buys, then resells to investors for a small profit. The real estate wholesaler buys low, and sells low, making a small profit while providing a much-needed service to investors.
The time saving service of a wholesaler adds to a real estate investor’s long-term profits, and is especially helpful for large investors, such as hedge funds, and other professional investors who have busy professional lives.
How do Real Estate Wholesalers Make a Profit?
All wholesalers buy low and sell low at a modest profit margin, so the only possible way to make a business profit is with volume.
The best real estate wholesalers have a research staff in addition to an administrative staff, so they have a significant overhead to find the best investment properties in their community. They are experts at finding a large number of outstanding real estate investments, which they resell to investors for a modest profit. And because of the volume of properties wholesalers find, buy, and resell each month, they can produce a business profit.
How do Wholesalers Help Property Investors?
If you have worked with an outstanding wholesaler, you know the value that is brought to your business through cost savings and the long-term profit produced with high-quality investment properties.
First, a good wholesaler saves an investor time by researching the overall geographic area, and specific properties. Research not only includes finding properties, but also includes research into the budget required to purchase and rehab the property, and financial projections in respect to the property’s future profitability.
Second, a good wholesaler provides real estate investors with the volume of profitable properties they need to grow their real estate business. In such cases, the wholesaler becomes a valuable member of the investor’s team by providing a steady stream of new investment properties.
Third, a good wholesaler finds off market properties that are bought and sold before they make it to the retail market and the MLS.
Overall, working with a real estate wholesaler is like working with a wholesaler in any other industry. As investor pays a small fee for the expertise of the wholesaler to find the best real estate investments, often times before they hit the market, thereby increasing the investor’s efficiency and profitability.
What Makes a Good Wholesaler?
Most importantly, a good wholesaler puts together good real estate investment deals.
If you’re an experienced investor, you can review the investment proforma for properties a wholesaler has available, and quickly tell if the wholesaler has outstanding or mediocre properties for sale. Also, check the reviews of past customers posted on social media and the wholesaler’s website for insight into the profitability of the wholesaler’s past deals, and the service provided by the wholesaler.
Second, a good wholesaler doesn’t exclusively buy properties listed on MLS. Although there are gems to be mined from the MLS that a good wholesaler can dig up, the best wholesalers don’t simply regurgitate the MLS listing. A good wholesaler finds value where others do not, which includes off market properties not listed on the MLS.
Graystone Investment Group
Graystone is an experienced Investment Group wholesaling properties in the Greater Tampa Bay market (on the Gulf Coast of Florida).
Unlike other wholesaling groups, we find properties that we resell to investors at discount prices, while also connecting them with private financing. We also coordinate with rehab and management companies we’ve worked with for years, at no extra charge.