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Three Advantages of Buying Property From a Wholesaler

Three Advantages of Buying Property From a Wholesaler

wholesalerWhen real estate investors go about acquiring an investment property, there are several approaches they can take.  One is for them to go out and find a good investment property themselves, and another is buying property from a wholesaler.

While there are some advantages for investors who find a property themselves (such as being able to purchase the property at a lower cost), there are also a lot of downsides.  In fact, if you’re an investor buying property from a wholesaler might make a lot more sense.  Here’s three reasons why:

No marketing required

Finding and acquiring good investment properties requires good marketing.  Good marketing requires an investment of time and money.  Sure, you can spend a few bucks printing off flyers, plaster them around a neighborhood where you want to buy property (if local ordinances allow), and hope to get some leads from it.  Perhaps you’ll get lucky and will be able to buy a property at a good price, if you don’t face competition from other investors in the area.

Realistically, finding good investment properties will probably take more marketing than that.  You’ll probably have some direct mail expenses, printing expenses, and perhaps even the expense of designing and hosting a website or landing page.  Then there’s email marketing expenses, call tracking software, graphic desgn expenses (so that your marketing collateral doesn’t look like it was designed by a third grader), etc.

These expenses can really start to add up, and when you take them into account the money you save by not having to go through a middleman to acquire a property might not be all that much after all.  This doesn’t even factor in the time involved in managing all of that marketing, which is time that you can’t spend working on rehabilitating and selling the property (or finding tenants).

You don’t need to bring your own team

A good property wholesaler will have working relationships with attorneys, title companies, and contractors in the area.  They’ll have expertise in the sometimes complicated process of negotiating contracts and buying and selling properties.  While you might have some expertise in this area yourself, chances are you probably won’t be as good at it as someone who sells wholesale properties full-time.

In any business, the key to success is to focus on your strengths and outsource tasks you aren’t good at.  If your strengths lie in the process of rehabilitating a property, then letting someone else find the property and handle the paperwork might be your best bet.

Volume

If you are only buying properties that you find and acquire on your own, you’ll end up doing a lot fewer deals.  On the other hand, if you work with multiple wholesalers, you’ll be able to acquire more properties in a shorter amount of time—more than enough to keep you busy.  While it may be true that in some cases you might not make quite as much money on each individual property as you would have if you had found them on your own, you will more than make up for this by increasing the volume of properties in your portfolio.

In summary, there are definitely advantages and disadvantages to buying properties from a wholesaler.  However, if finding properties and negotiating deals are not your strong suits, it might make a lot more sense for you to buy properties from a wholesaler.

At RVA Property Solutions, we always have at least a few wholesale properties available at any given time.  You can browse our inventory here, and sign up for our wholesale buyer’s list so that you’ll get notified as new properties become available.

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