There is a world of difference between wholesale and retail homes.
The major difference is usually the amount of work you have to put into them, the risk you are taking on when purchasing them, and the reason you’re buying them (Investment vs. Primary Home)
When buying retail, your usually buying a home that is move-in ready that day and very rarely needs major work done on it other than minor repairs that are usually solved by having the seller fix them or by reducing the purchase price.
Wholesale properties otherwise usually need major repairs or if you’re lucky, a new set of paint and some cleaning up and it will look right as rain. However, that is the exception and most wholesale properties need major fixes and may need months of repair time.
The other big difference in wholesales vs. retail is the regulations and risks involved. Retail homes are full-priced and very rarely sell under market unless it’s a short sale or HUD sale. Both of which have their own nuances of pros and cons as they are competitive and not exactly the easiest to work with. They also have giant contracts, inspections, and can take weeks to close. This protects the buyer in all aspects of the sale.
Wholesales on the other hand can have contracts as little as one page, can have little to no inspection period, and can close in only 7 days. The issue with this is that it’s much riskier than retail as all buys are “as is” meaning there are no recourses for buying a lemon property. If the repair value isn’t right or if there is a problem that wasn’t uncovered by you or the wholesaler, you’re stuck with the property. Unless that is what you wanted in the first place.
The last major differences between retail and wholesale is the use of realtors. Realtors serve a very useful purpose in retail as they are experts in their field and help buyers who have no idea how real estate works, how to negotiate contracts or what is needed to protect themselves from bad deals on the market. That is why the retail market exists. To help people who have no interest in learning real estate and just want a place to live in the neighborhood they always wanted.
In wholesaling, however, there are no realtors. There aren’t 20 pages of contracts or in-depth inspections. Entailing huge risks associated to wholesale buying that can easily knock out the beginning investor or person interested in real estate. This can be as simple as not knowing if certain parts are properly permitted, internal damage to the interior that can only be noticed by a trained eye, or just not buying it right causing you to break even on the resale or even lose money. (A lot of work for no payoff)
That is why it’s imperative to be properly trained when dealing in wholesale properties or to have someone who is properly trained to protect you from a bad deal (Mentor or Realtor). This way you can avoid the major issues and mistakes that will cause you hardship and loss, and instead profit heavily.
If you’re interested in more about how to properly protect yourself in real estate and may even learn and know more than your realtor, its tome to check out the Matrix. The Real Estate Gym.
With training (Not an education) on:
Wholesales – Buying property underpriced and selling it to investors
Probate – buying/selling property in Probate (administrating property after someone has become deceased).
Tax Liens – how to buy tax liens on overdue taxes on properties for interest payments or to foreclose on the property and resell
Pre-Foreclosures – buying properties from distressed homeowners to avoid foreclosure
Bankruptcy – buying/selling properties from people who filed bankruptcy
Buy and Holds – buy properties and rent them for a monthly income
Financial Resources –learn more about how to fund your deals and get buyers to sell them too
Financial Fitness – learn how the rich stay rich and the poor stay poor with the offense and defense of finances. Once you know the game, you can protect yourself with your money and secure your financial future.
Self-Directed IRAs – Don’t gamble on the stock market any more with your retirement, take charge of your own finances and use a self-directed IRA to invest in real estate or even your own business