With the real estate market beginning to stabilize in California, many first-time investors are beginning to consider wholesaling as a viable money-making opportunity. While this real estate strategy can appear relatively simple, there are a few nuances newcomers should know. Read further about tips on wholesaling real estate in California for beginners.
What is Real Estate Wholesaling?
Simply put, wholesaling real estate in California is when you purchase a real estate property and then assign the contract to another buyer. Essentially, you are the middleman who buys and sells the purchase contract. This can be appealing because ideally, you can find a cheap deal (a foreclosure, for example) and sell the purchase contract for a handsome profit. It’s also attractive because you’re not handling any physical real estate such as renovations and repairs for flipping purposes.
How to Start Wholesaling
It sounds like an easy process, but most beginners don’t realize the key to success is all in the details. Here are a few winning tips to help you start wholesaling real estate in California.
Get an Education
An attractive bonus linked to wholesaling is that you don’t have to have a real estate agent license to do it. However, that doesn’t mean you shouldn’t get savvy about real estate and the housing market to get started. To do well you’ve got to be apprised of unique real estate laws, terms and conditions in California. You can do this and ensure best results if you take a course for wholesaling real estate. Getting the knowledge and proper foundation sets you up for better earnings and results.
Know the Market
Perhaps one of the biggest factors for running a successful wholesale gig is all about knowing the real estate market in California. You can begin learning about properties, and finding the best properties to pounce on by joining a local real estate community. For instance, you can join the CAR (California Association of Realtors), which publishes real estate market research data every week. You might also want to partner with a real estate agent who might agree to providing you access to Multiple Listing Services (MLS) data. At the very least, you can know your market better by getting MLS information through real estate sites like Zillow or Redfin.
Create a Buyers and Sellers List
Once you have access to property listings, and have a feel for the market in your area – you should make a prospective buyers and sellers list. As the name implies, this is a list of potential buyers you can sell your purchase contracts to. Because you want to make the biggest profit, you’ll want to begin making a list of motivated sellers. This could be owners of foreclosed homes, or landlords. In many cases, homes like these are in distress, and the buyer might be at the point where he or she just wants to do a quick sale. When you build a list of motivated buyers who want to quickly get out from under their foreclosed homes or homes in need of major repairs, you are in a better position to act fast when the opportunity presents itself.
Additionally, you should build a solid list of buyers. These are potential investors or real estate pros who can recognize a good deal when they see it. You can begin building a buyers list via social media, talking to real estate agents, as well as participating in real estate groups and forums. Remember that every lead holds potential, so stay active in the community in order to bolster your buyers list.
Make Your Services Known
Perhaps one of the most overlooked tips for beginners getting into the real estate wholesale game is paying attention to marketing. It’s one thing to get educated and prepare a buyers list, but you can raise your chances of purchases and sales if you market your services as a real estate wholesaler.
There are many ways to market your services. Tactics such as direct mail, or putting up signs advertising your services have been proven effective for veteran wholesalers. You might also consider putting up a website and/or building a Facebook page that conveys your skills and services to parties who are in the market to hire you to oversee a buy-sell transaction.
Mingle With Like-Minds
The real estate industry in California tends to be a tight niche, and very often success boils down to the old adage, “It’s all about who you know.” Therefore, it’s a good idea to rub elbows with professionals who are succeeding in the business. This might mean getting a mentor who can show you the ropes. Or, you can join real estate groups for advice or exchanging ideas.
The point here is to communicate and share with real estate pros in your area. You never know. One of these veterans might be able to teach you something amazing, or point you in the direction that can manifest into a windfall.. Ultimately, real estate is a people business, so associating with like-minded people is a great way to get started in real estate wholesaling in California.
