As the US enters into a second year of combating inflation, interest rates will continue to rise before they come back down.
The problem with rising interest rates is that it makes borrowing more expensive, and lenders need more available money to loan out, making it more competitive and challenging to get cash for new business growth.
And that hesitancy to loan out money will only increase due to the news of the SVB collapse that caused the second-largest banking failure in history and the most significant financial challenge since 2008.
So if you’re in need of funding, you need to look for an unconventional way to fund your startup.
One alternative may be in real estate, but not in traditional forms that you may know of, such as using your home equity to get financing.
Instead, the solution may be in a new investing strategy known as wholesaling real estate.
Wholesaling is the process of securing a purchase agreement and then reselling it to a secondary buyer at a markup.
This process is safer than traditional real estate transactions because you don’t take physical ownership of real property.
What Is Real Estate Wholesaling?
Real estate wholesaling is a type of investing in which an investor (also known as a “wholesaler”) works with distressed homeowners to buy and sell their properties.
The investor typically obtains the property at a discounted price and then finds a secondary buyer who buys the property for a higher price.
This allows the investor to pocket the difference as a profit without ever actually owning the property.
It’s an excellent way for entrepreneurs to get into real estate investing without putting up money upfront or dealing with complex issues like construction or DIY rehabbing.
Plus, there’s no need for experience or licensing in most states.
Real Estate Wholesaling Example
Real estate wholesaling is a great way to make money in the real estate market without having to put up any money upfront.
Let’s say an investor has identified a property they want to buy and has negotiated with the seller to purchase it for $90,000.
The investor doesn’t buy the property outright but instead agrees with the seller, giving them the right to buy it.
The investor then turns to their networks and finds someone willing to pay more than $90,000 for the property.
The investor sells them the contract for $100,000 and pockets the difference as profit.
This strategy is easy to execute without needing any experience or license in most states, making it an excellent way for new entrepreneurs to get into real estate investing quickly and easily.
Plus, you can use your profits from wholesaling deals like this to fund your startup business.
Wholesaling With No Money
Wholesaling houses without putting any money down may sound too good to be true, but it’s not. However, with the right strategies, you can become a successful real estate wholesaler with no money of your own.
Real estate wholesaling is all about finding properties at a discounted price, then quickly turning around and selling them for a profit.
You don’t need to put any money down on the property and can use creative financing tactics, such as seller financing or hard money loans, to fund the purchase.
You’ll also need the right network to ensure you have a steady stream of deals coming in.
Utilize online resources like local real estate clubs or join forces with other investors who can help you find potential deals.
Once you have your network established, developing relationships with motivated sellers is vital to success.
Easy To Start
Starting your own business can be an intimidating task.
Between the paperwork, financing, and marketing, it’s easy to become overwhelmed.
The hardest part of any startup is securing financing, but using wholesaling to generate a quick return may be a good option for bootstrapped entrepreneurs.
In most states, there aren’t a lot of hurdles or licensing requirements to get involved with wholesaling real estate, but you must contact your state regulatory body to ensure that you comply with all laws and regulations before diving into this alternative funding opportunity.
Wholesaling real estate is a unique, alternative way to raise funding for your startup, and you may even find a second business to build in this alternative real estate investing strategy.