Wholesale real estate is a tough business, but it’s less risky than investing. However, that is not to say that the process is going to be smooth all the time. Like any other business, it has its ups and downs. If you know what you are doing and enjoy every stage of the operation, you will find this line of work to be very profitable.
Whether you’re just starting out in the industry or have been in the business for years, I’m here to share 5 common mishaps wholesalers make that you need to avoid, as well as ways to prevent them from happening.
do not overload
I understand that you just want to earn more. But if you’re making unnecessary charges on a deal, then you need to reevaluate your contract. Don’t be too greedy on a deal. Instead, focus on sealing more deals and generating more from them.
Don’t get property contracts that are too high
This is the same with signing properties that are overpriced. If you, as a buyer, would not accept it because of the high cost, then do not get contracts that are outrageously priced.
Don’t underestimate repairs.
Location plays an important role in linking costs. Repairs and other services may be priced lower in some areas and higher in others. It is not a one-size-fits-all system. Don’t underestimate repair costs and consider it when evaluating the property.
Don’t Overestimate After Repair Value (ARV)
The ARV calculates the future value of a property in distress once it has been repaired. After completing the renovation work, you must take into account the purchase price and renovation costs to obtain a more accurate sales price.
Knowing the ARV of a property and how to calculate it will help wholesalers and pinball machines see if there is enough room for the lot to be profitable.
give a good presentation
You see number after number without getting a clear picture of the property. How is it assigned a more accurate and reasonable estimated value? Of course, you do your research. I suggest you attach photos and a video. This helps make the decision process faster and around the ballpark figure.
You will learn and grow as you progress through the real estate wholesale journey. The sooner you figure out how to avoid these mistakes, the better it is for your business and your customers.