Real estate wholesale investing is a great way to supplement the income on a regular basis, and if you want you can use wholesaling for your entire income. You too can take advantage of wholesaling to supplement or complete your income, but just how much money can you bring in through wholesaling houses for a living?
Real estate wholesale investors have a glut of cheap homes from which to choose on the market. So, even though the investor will only be bringing in a certain amount of money per sale they’ll always have another sale around the corner. This can certainly be called job security.
Real estate wholesaling is different from flipping houses. Wholesalers bring in less money per deal compared to house flippers. However, you’ll be able to make more deals as a wholesaler so you’ll be bringing in that money more often.
When Do I Get Paid?
Any investor flipping houses will find that they don’t actually get their profits until after the house is sold to the buyer. It can take about 30–45 days for the mortgage company to get to the actual property closing, which is certainly a long time for anyone waiting to get a paycheck. Real estate wholesale investors have to wait until the title has cleared with the title company. An investor can spend months investing time and money into the house and not get paid until that property is sold.
In wholesaling, it’s possible to get paid within as little as a week after closing. Often real estate investors are the ones who buy these properties, so it’s likely that they’ll be able to pay cash for the house.
These investors are called cash buyers. They have cash to pay when wholesaling houses for a living. The buyer transfers the funds to pay for the property right into an escrow account with the title company. The title company processes the paperwork and a check for the profits is available in just a few days.
There is potential for an even quicker payment when assigning a contract on a real estate wholesale deal. Just instruct the buyer to bring a cashier’s check for the amount of your fee to the closing deal. Once the contract is assigned, the buyer hands over the cashier’s check and the investor only has to wait for the check to clear in their account.
How Much Cash Do I Make Per Deal?
The average real estate wholesaling deal brings in between $3,000 and $10,000 in profits for the investor. Compared to the profits of those who make money flipping houses this is quite small as a house flipping deal can bring in about $30,000. House flipping can take several months, up to a year to complete. Plus, they involve cash money for rehabs and time to fix up that property
If an investor closes 3 or 4 real estate wholesale deals a month for just $3,000 they could make as much as $12,000 a month wholesaling houses for a living. That $12,000 times 12 months in year and you get $144,000 a year wholesaling house for a living!
That’s an incredible profit compared to the measly $30,000 you’d make flipping a house over the course of a year. Plus, wholesaling deals can close in just a few days, and I’ve heard of deals that closed on the same day as the investor found out about the property.
The idea in wholesaling houses is for the buyer to get the majority of the profit. The wholesale investor actually gets a kind of ‘finder’s fee’ for the property and the buyer gets to spend time fixing up the property and marketing it for a larger profit of his or her own.
The investor doesn’t let the properties go for a pittance. A wholesaler should never let that buyer talk them out of the fee they’ve asked for in assigning the contract on a real estate wholesale property. The lowest a real estate wholesale deal should close for is about $3,000. This is often on properties that the investor only holds for a few days. Of course, those sales also depend on the house and its real market value.
Compared to those who make money flipping houses, the concept of wholesaling houses for a living is a great idea. Investors close deals more often and get cash buyers for the real estate wholesales, meaning that they’ll get more profits faster.
