Do you want to earn an extra $5,000 next month? No really, I mean it. Of course you do!
Flipping or Wholesaling is the way to do it. It's fast, fun, and easy. First, let's determine what wholesaling actually is. Some folks consider buying a house, rehabbing it, and selling it quickly wholesaling. Others consider buying a house and reselling it without doing any work on it, wholesaling.
To us, wholesaling is making money on a house you never own. Never owning the property is the key to successful wholesaling. “How do you do that?” you wonder.
That is our topic this month, making money on houses you NEVER own. The first step is finding a property that has sufficient equity. Try to find a property still owned by the homeowner and get it under contract. Work it out so that you have 30 to 60 days to close. Be sure to place the words “and/or assigns” after your name on the contract. Give a small deposit (we typically offer a$10.00 deposit) to secure the property and get to work.
Run an ad in the “houses for sale” section of the paper. Use key words like “handy”, “investor special”, “needs work”, “distressed”, and “must sell”. You will get hundreds of calls. Be sure to get the name and number of each caller so that you can call them with your next house as well. If the house is a good deal with plenty of equity, one of these buyers will want it.
You have your buyer what next? Assign your contract to the new buyer, who, in turn, closes in your place. It breaks down like this – You placed the property under contract (with the words “and/or assigns” next to your name) for $45,000. You found a buyer and assigned your contract to him for $50,000. He then comes to closing and buys the house.
The original homeowner receives his $45,000 and you receive your $5,000 assignment fee. You just made $5,000 and all you invested was $10.00 for a deposit and some time answering the phone. Your buyer rehabs it and sells it for $80,000. Everyone is happy.
Some of you might be wondering, “Why make $5,000 on a wholesale when I can make $20,000 on a rehab?” It's basically a matter of personal preference and, of course, your financial situation. You might not have enough cash to rehab a property, but you have $10.00 for a deposit and plenty of free time. No matter which path you take, it's win/win for everyone!