Reverse Wholesaling is an innovative way to approach the wholesaling business.
Essentially, the process entails you, as a wholesaler, finding a property and putting it under contract. Then, you will find a buyer and sell the contract to him or her. The buyer closes in your place and you do not have to spend a dime. Additionally, you do not have to worry about the rehab and all of the costs and troubles that are included with it. Instead, it is the investor who you sell to that will usually do the rehab. You are given a sort of finderâ€™s fee for locating a good property for the buyer to invest in.
As long as you can find a buyer, you should be in good shape.
But what if I canâ€™t find a buyer?
Finding an investor to buy your property is often the trickiest part of the process. Each buyer has his own needs and demands. Some buyers donâ€™t have a lot of money so theyâ€™ll only want to work with smaller properties. Other buyers want a property that is in their own town so they can stay close to their other obligations in life.
If you are not able to find a buyer in time, you will have to close and buy the property yourself. That means, if you donâ€™t have enough money to buy it, you could run into trouble.
Luckily, there is a way to avoid this problem. The process is called â€œreverse wholesalingâ€, and itâ€™s a fairly simple idea.
What Is Reverse Wholesaling?
The most difficult part of wholesaling is finding a buyer, so the idea of reverse wholesaling is that you get this step out of the way first.
There is a deadline you need to meet after you put a house under contract, after which point you must pay for it yourself. However when you get a buyer first, there is no real deadline you need to meet to find a property. This worst that can happen is that the investor you are finding a house for might think you are taking to long and decides he no longer needs your help. If that happens you will wonâ€™t loose any money or run into any legal ramifications.
Also, by finding a cash buyer first, you can find out exactly what the buyer want in a property. You can see what their price range for a property is and what types of homes they are looking for. Maybe theyâ€™re looking for basic three bedroom two story homes, or maybe they want a multi-family house with more than one kitchen because they intend to rent it out. Whatever the case, finding out first by reverse wholesaling means that you'll never need to blindly look for a property.
How To Find An Investor
When finding a cash buyer, you want to start...