Wholesalers typically make smaller profits but buy and sell properties in large quantities. They may buy 50 homes at a time from a bank and then sell them for a small markup to move them quickly and do it again.

A more common wholesale approach among creative real estate investors is to secure properties with no money down and do a “quick flip”. Typically, the property or owner must be distressed in some way for the deal to make sense.

Wholesalers work on some sort of distress either by the owner or the property. Distress can come in many ways such as divorce, job relocation, unemployment, severe damage to the property, etc. Once a property is gained at a significant discount the buyer quickly sells at markup of the buying price. Typical markup amounts range from $5,000-$15,000.

In a nut shell, real estate wholesale companies put properties (normally distressed properties) under contract and assign or resell the property to another investor. The end investor uses either cash, lines of credit, or hard money loans to purchase the discount property. This allows quick closings on properties that sometimes need extensive repairs.

A wholesaler lives off of the idea that price overcomes all objections. If you can sell a property for a low enough price it doesn’t matter what’s wrong with it, somebody will buy it. A wholesaler focuses on developing two things: a system for finding deals, and a network of investors to sell to.

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