Wholesaling real estate is a great way to make some fast cash and you can do it without needing any of your own money or credit! In a typical wholesale transaction an investor can place a piece of real estate under contract at a significant discount and then “assign” their rights in the contract to another investor or end user at a discount for a fee. This “assignment fee” is how a wholesaler can get paid without needing to be a licensed real estate agent! A major hurdle of many investors is finding enough inventory to sell to their investor database. This is where “co-wholesaling” comes into play.
What Is Co-Wholesaling?
Co-Wholesaling is simply getting your wholesale inventory from other local wholesalers. This method of property acquisition is a great strategy for new investors that don’t have the money to spend on marketing for motivated sellers.
When I first started wholesaling real estate this is exactly where I got my inventory. I went around to all the other local wholesalers in Arizona and got onto their investor lists. I did this by searching “cash for houses” companies on Google. I would find their phone number, call them and say: “Hello my name is Cody Sperber and I see that you buy houses in and around Phoenix, AZ. Do you sell any of the houses that you buy? Do you have any available homes right now for sale at a discount?” If they say yes then I ask them to send me over their list of inventory and let them know that I may be interested in some of the houses, or I may know an investor that would be interested. I ask them the following: “If I bring you a cash buyer would you be willing to split the assignment fee with me?” If they say yes then I stay in touch with them and constantly get their freshest inventory to market to my cash buyers. This way I can focus on just building my cash buyer database and not worry about getting inventory for right now. I do this until I get every wholesaler in my local area on board that is willing to split any money made with me.
WHOLESALING TIP: If anyone gives you any grief for not being a licensed real estate agent and trying to make a commission (which is what a real estate agent would say to you about an assignment fee) simply put a “30 day option agreement” or get a signed purchase and sale agreement on any of the wholesale properties you’re marketing and you will legally be able to market the deals without violating any laws! Once you have a signed option agreement or purchase and sale agreement you have the “equitable rights” to market the property for re-sale!
Now your ultimate goal is to not have to depend on other wholesalers for your inventory but in the beginning this is a great way to get a fast start. Once you do a few deals and make some quick cash you can use that money to market for your own discounted deals that you fully control. Hope this helps and I hope anyone reading this takes actions and starts co-wholesaling today!