If you are new to the term “wholesaling”, start by reading my blog post “Wholesaling – How To Make Money with No Cash”, and get acquainted with the basics of this great investing tool.

As I reviewed in the above linked post, wholesaling is an ideal entry point for new real estate investors because they can make money with little or no cash, as long as they will do the work and make good decisions. In comparison, buying to rehab and sell requires cash – cash for construction, utilities and other carrying costs, cash for selling costs and other outlays, as well as managing the project to completion.

Given the work differential, wholesaling sounds great! Why would anyone bother fixing to flip?

Because, although wholesaling is faster, it also generates much smaller profits per deal, while flipping scores bigger home runs.

• Flipping is what I term“the long dollar” (bigger money but bigger risk).

• Wholesaling is what I term“the short dollar” (less money, but get paid today and no out of pocket exposure).

New wholesalers need to be willing to do the work, look at properties endlessly, understand valuation and negotiate with sellers. But the very good news is that once you find the deal,your goal is to turn it around quickly and walk away with your cash within days, not weeks or months.

New wholesalers should find and connect with an experienced real estate investor to provide guidance and mentoring, to help avoid mistakes and know what the next steps should be. Time spent with an experienced investor can be a great learning experience of its own.

Flippers can also benefit from doing some wholesaling to raise cash for their flip projects. The cash needs can seem endless while a flip project is under renovation or construction. A quick wholesale deal can help fund the project through to completion.

Many of the core skills you’ll want to develop as a real estate investor are equally valuable for both wholesaling and fix & flip or hold. Both are two very good options of a real estate investment strategy! Learn more about wholesaling in this month’s blog posts, and even more in my new ebook “How to Find Underpriced Properties: 10 Secrets for Creating Wealth with Real Estate in ANY Economy“.

Does wholesaling – low-risk, low-cash – sound like a way for you to get into real estate investing?

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