Investing in real estate can be highly rewarding. Whether you choose to hold a rental property for passive income or flip houses for an active income, this form of investment is worthwhile if you have the time, capital and expertise to make it work. When investing in real estate it is important to have a team in place that will help ensure you are investing in quality deals that you will be successful with. Your team may consist of a realtor who understands the marketability of a property, connecting with a wholesaler who will find you a deal on a property and set you up for success, tradespeople who can execute the renovation plan and a financing partner such as Calvert Home Mortgage; offering a unique flip financing product, expertise and tools such as our Flip Analyzer to assist in funding successful flip projects. We will focus on the value of using a Wholesaler in this article.
Once those are in place, the next thing to do is to acquire the property – which is typically the area which presents the largest challenge for most real estate investors. There are two main options real estate investors have in order to address this challenge.
The first is to hunt for properties on your own, either through listing sites such as Kijiji and contact the homeowners yourself. You then analyze a list of properties that fit your buying criteria and match those to the owner’s selling requirements (e.g. closing date, price, conditions). Then negotiate with the owner and prepare the paperwork to process the deal through the lawyer. By the time you get to close on the deal, something else may not line up (time to work on the project, capital, contractor scheduling).
The second way to find deals is to use professionals that will handle most of the work to acquire a property off-market and sell it to you directly. These professionals are called Wholesalers. By definition, a wholesaler finds deals and connects a buyer with those deals, charging a fee for doing so. In essence, they:
• Come up with the marketing to attract sellers
• Visit the house and take detailed notes on what needs to be worked on
• Analyze the property to review the profitability
• Negotiate the purchase of the house and firm it up in a contract
• Find a buyer looking for this kind of property
• Process the purchase and paperwork with the seller’s lawyer and buyer’s lawyer
When you are on the “Buyer’s list” of a particular wholesaler, it gets much easier to select your property from the curated list they send you. They will know the area you wish to buy in, your price range, and the types of houses you are interested in. The next thing for you to do is contact the wholesaler and bid on the home you want. Wholesalers present the homes to you instead of you hunting for them on your own.
If you’re a Real Estate Investor looking for properties, wholesalers may be a source of off-market purchase opportunities. Click here for a list of wholesalers in Alberta and Ontario who our Real Estate Investor clients have successfully worked with. Feel free to sign up for their Buyer’s List via the links provided in the PDF.
