Wholesaling vs. Flipping a house

By November 9, 2019 Blog

The easiest way to get into real estate is also the best.  So many of the gurus these days say to get into wholesaling first for one reason or the other.  We see a lot of guys moving in this direction and agree that the experience earned from evaluating and finding deals is what can eventually lead to bigger and better profits.

Essentially wholesaling is a marketing campaign.  You might use mailers, a call list, signs on street corners and telephone poles – no matter which you prefer – it’s basically trying to create a funnel where buyers bring you their house they are trying to sell.  You are looking for unlisted houses that are in some way or another distressed.  This could be a distressed property, where the house needs substantial repairs, or a distressed seller like foreclosure or divorce.  Regardless, as a wholesaler you are looking to help them solve their problem by getting them out of their house – so this is a good thing!!!  There’s a ton of info about wholesaling – check out  https://www.biggerpockets.com/blog/wholesaling-60-day-guide – so we won’t get into it too much here, just the basics.

For wholesaling you basically have these steps:

  1. find the deal that is below market value AND get it under contract
  2. send out the sweet deal to your buyers/investor list 
  3. sell the contract to another buyer.

Just a quick note – a lot of individual wholesalers spend a lot of their time on sourcing deals and never really build up that investor/buyer list.  So, what they do is basically send their wholesale deal over to a larger wholesale company and create a daisy chain.  This is ok – but, but, but – here the deal people!! – if you can daisy chain to another wholesaler, you can flip and take a larger profit!

Basically a wholesaler makes a flat fee for selling the contract.  This can be very lucrative, especially if you can do a few deals a month.  The flat fee is normally a few thousand dollars.  Very nice right?!

Now compare this to a flip.  A well planned flip, even if it’s just to another investor, might make you a considerably more!  Instead of just a few thousand dollars it’s possible to make much much more.  In our flipping and wholesale business we’ve done it all and seen ten times profits off flips compared to wholesaling.  We’ve done multiple flip deals at $15k, $25k, and $30,000 – without ever touching the property.

So here’s the big question – HOW do you take the same great wholesale deal and flip it and make a HUGE profit instead of just selling the profit for a few thousand dollars?  Especially when you don’t have any money to buy the house in the first place?

The answer is simple:  Use a Private Hard Money Loan.

Contact us directly to find out more or stay tuned for a followup article on How to 10x your wholesale profit by flipping with hard money.

Flip House Funding Texas

Author Kyle O'Keefe

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