James Thornton of Arizona is a real estate professional with a passion for transforming challenging scenarios. With a decade of experience, James specializes in revitalizing outdated and neglected homes, bringing them back to life. In the following article, James Thornton explores the world of wholesale home buying, discusses their pros and cons, and providing strategies for effective real estate wholesaling.

When it comes to real estate, there are various ways to invest and make a profit. Enter, wholesaling.

Perhaps the most compelling part of this method is that the investor can earn a huge profit without having to own any properties or put down money. This is a venture wherein the investor, or wholesaler, enters into a contract with the property owner. The wholesaler sells the property on behalf of the owner for profit.

According to IBIS World, the real estate industry raked in $214.9 billion so far in 2023. Out of this figure, wholesale real estate earned $3.7 billion and is expected to grow 1.8 percent every year from now until the year 2026.

James Thornton of Arizona Discusses the Pros and Cons of Wholesale Home Buying

Pros

• No Significant Financial Risks: Wholesalers do not have to own or purchase a property in order to sell it. This means that they do not have to cover any repairs, utility costs, holding fees, and other costs associated with it. Upfront investment is also minimal.
• License is Not Required: James Thornton of Arizona explains that most states require a license for marketing or offering properties for sale, but the law sees wholesalers differently – wholesalers are only offering the right to purchase a property. Therefore, wholesaling is ideal for real estate beginners and for those who are looking to build their portfolios or build a network in the industry.
• Earn Quick Profits: Depending on the contract, wholesalers typically earn between 5 to 10 percent of the property’s selling price. Double closing, wherein the wholesaler chooses to purchase the property with their own money and sells it, can help them earn an even bigger profit.

Cons

• Competitive Market: James Thornton of Arizona notes that wholesale real estate is very competitive and agents may struggle to find good deals right away. Contracts also typically include a closing date by which the deal has to be closed.
• Location Matters: The wholesaler must be strategic in choosing the location of the properties they will sell in order to find buyers and earn a profit.
• Finding the Right Buyer: Selecting the right buyer for the property is also important to ensure that they follow through with the sale.

James Thornton Provides Tips for Effective Wholesaling in Real Estate

Tip # 1 – Educate Yourself

Before going into the wholesale market, it’s important to know the basics. Researching the markets, learning wholesale laws, and attending events and seminars are good places to start. James Thornton of Arizona explains that agents can also opt to enroll in wholesaling courses to learn from professionals. This will help agents learn the fundamentals that they need for successful transactions.

Tip # 2 – Gather the “Team”

James Thornton of Arizona says that a wholesaler will need to work with various professionals from different industries throughout the process, from scouting for a property to selling it to a buyer. It would be helpful if they already have trusted names in their contacts. Some important professionals that agents will need to contact during the wholesaling process include home appraisers, home inspectors, and a title company.

Tip # 3 – Find the Right Properties

As mentioned, it’s important to go for properties that are attractive to buyers and will sell quickly. James Thornton of Arizona says that there are various ways wholesalers can find properties, including:

• Multiple Listing Service: Utilize the Multiple Listing Service (MLS) to find real estate properties on sale.
• Networking: Asking for input from friends, family, and colleagues can help wholesalers find potential properties on sale.
• Real Estate Websites: Wholesalers can access a list of off-market homes from websites such as Zillow, Trulia, and Redfin. Social media websites are also good places to look for properties on sale.

Tip # 4 – Build a Buyer’s List

Potential buyers abound in real estate events and seminars. Agents can build a list of potential buyers by attending these events or by joining online communities of investors.

Tip # 5 – Learn About the Contract

James Thornton of Arizona explains that wholesalers must learn about the “Purchase and Sale” agreement, the contract that will be used in wholesale home-buying transactions.

Conclusion

Real estate wholesaling is a great way for both beginners and experienced agents to earn a potentially huge profit, expand their network, and gain exposure in the industry with minimal expenses and without having to own any properties.