(1942)No we're not talking about the Three Muskateers - we're reviewing roles, or players you can work to make money in this business. Real estate wholesale is a very lucrative business that you can get into easily and make money at quickly. With repetition you will achieve a level of skill locating properties that you may decide to stay with this concept. But for now, let's simply explore other avenues for this discussion.
The Wholesaler
The wholesaler locates the property that can be purchased below fair market value, puts that property under contract at one price, and then sells either the contract or the property at a higher price to someone else. After the wholesaler has sold a contract, the closing, any rehab work, and final resale of the property are entirely up to the investor or buyer that purchased the contract and ultimately the property. This is one of the easiest and most simplistic real estate transactions to accomplish. As a beginner in creative real estate, wholesaling your contract is a great place to start. The turnaround time for large profits in hand is just a matter of days, enabling you to ‘earn while you learn’ the business with very little or no cash outlay (depending on the deal type). One of the tools I use to find property is a site created by the folks in California at ForeclosureS.com. Take a look at their offer on the right side of this page. They are great at what they do. At some point in your personal progression and development in creative real estate, you will probably find yourself evolving into one or more of the following advanced type of wholesalers.
Joint Venturer
A joint venturer is like a wholesaler in that he or she locates a good deal and then signs a purchase contract with the owner. Unlike a wholesaler, who has no further involvement with the property once the contract has been assigned, a joint venturer will be involved in the entire deal from purchase to resale. A joint venturer usually provides the investor with a contract plus whatever labor, services or supervision they agree to in a Joint Venture Contract*. It may take the joint venture partners several months to receive their profits, unlike a direct wholesaler that receives his or her margin in a matter of days.
Investor
An investor commits money, time, labor, and other personal resources in order to gain a financial return. Most investors involved in creative real estate transactions will either operate on an all cash basis, have a line of credit, or have pre-approved financing. Some are low-dollar investors, while others have virtually unlimited funds to do business with. Every investor has one thing in common; they are always on the prowl for properties to acquire.
* A Joint Venture Contract outlines each partners responsibility, ownership, percentages, rehab work, and project timelines.
