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Wholesaling houses is an easy way to buy your first house without paying a ton of cash upfront. It’s also a great way to build equity fast.In this video I’ll show you how to find wholesalers, negotiate prices, and close deals quickly.
STEP 1: Find Wholesalers
There are two main types of wholesalers: real estate agents and private sellers. Real estate agents typically represent multiple buyers and sellers at once. They often charge a commission based on the total amount of money involved in the transaction. Private sellers are individuals looking to sell their own property. They don’t have to pay a commission, but they usually only list properties with a single buyer.
STEP 2: Negotiate A Price
Once you’ve found a wholesaler, you need to start negotiating a price. This process varies from wholesaler to wholesaler, but most will give you a range of prices to choose from. The goal here is to come up with a number that works for both parties. For example, if you want $100k for the house, then you might try asking for $90k-$110k.
STEP 3: Get Preapproved
Most banks won’t lend you money unless you already have a mortgage preapproval letter. This letter tells the bank that you can afford to borrow a certain amount of money. In order to get a preapproval letter, you need to submit a loan application. Once you’ve submitted the application, you’ll receive a letter within 24 hours telling you whether or not you were approved.
If you’re getting a home loan, it’s best to call your lender while you wait for the approval letter. If you do nothing else, waiting until after you’ve received the letter to apply for a home loan is probably going to be too late.
Don’t forget to bring copies of all your paperwork when you go to meet with the wholesaler. You’ll need them to make sure that everything goes smoothly on closing day.
STEP 4: Make An Offer
Now comes the fun part—making an offer! When making an offer, you’re actually just submitting a counteroffer to the seller’s original terms.
The terms may seem like a lot, but they’re pretty standard across the board. Most wholesalers require you to put 20% down, which covers costs such as inspections and other fees. They’ll usually allow you to finance the rest through a 30-year fixed rate mortgage.
