Wholesale real estate is worth it in 2024 if you are looking for a low-capital entry point. There are many financing options available for closing wholesale contracts. These include hard money loans, transactional funding, and private lenders. It's also for people who are comfortable building networks and negotiating sales deals. Wholesale real estate is worth it for licensed real estate agents that want more revenue. Aspiring real estate investors should understand a property's market value and purchase price. This establishes better cash flow.
However, this real estate appraiser on Quora said that real estate wholesaling is not worth it for beginners without a license. If you don't have knowledge of basic laws, you can lose money or get sued.
Even so, there are people who have achieved success in real estate wholesaling. Keith Everett Jr., or “Real Estate Ditty,” is a popular person in the industry. He closed his first deal by finding an absentee owner. Then, he partnered with another wholesaler to sell the deal, splitting a $5,000 profit. Since then, he has expanded his real estate wholesaling efforts across the country. Keith has completed over 500 real estate deals.
Real estate wholesaling needs much less capital than traditional real estate investing. MetaWealth states that a traditional real estate deal costs around $3,200 to $7,650. You'll also encounter an additional 4.5% to 9% expense for taxes and management costs. However, it can still require thousands of dollars in upfront investment. You need to pay for marketing to find potential deals. One wholesaler on Reddit claims to have spent $6K in just one month for lead generation. Real estate wholesaling is not worth it unless you have $5K to $10K in capital to risk.
Real estate wholesaling also isn't worth it for those who dislike sales. Although prospecting and networking are major aspects of wholesaling, selling is how you actually make money. You need to convince a property owner to sell their property below market price. Then, you convince a real estate investor to buy the contractual rights to the property above that price to make a profit. Some people feel this is exploitation.
That is why I recommend digital real estate over wholesale real estate. I have experienced how hard it is to find undervalued properties and sell them for a profit. Instead, I have rented out digital properties since 2014. It is much simpler and less risky to get started. Plus, it brings in consistent, long-term profit potential. It entails creating websites to attract customers for local service businesses. Each site can be rented out for $500 to $2,000 monthly in recurring revenue.
In this article, I'll help you decide if wholesale real estate is worth it or not. I will feature success stories, pros and cons, and profit potential. Towards the end, I'll talk about an online business that is more worth it in 2024 and beyond.
3 Experts’ Take on Wholesale Real Estate’s Worth
Ronnie Robertson says that real estate wholesaling is worth it if you know how to find opportunities. He made his first $7,000 deal in just a week. Ronnie focused on infill lots that required less complexity. This led to a $50,000 gain from selling nine lots. Ronnie used the DealMachine platform to generate leads and identify cash buyers.
He used his ability to negotiate and capitalize on market trends. This enabled him to secure lucrative property deals. He focused on building relationships with motivated sellers and cash buyers. Robertson honed his skills in identifying undervalued properties and accurately estimating repair costs.
Ronnie is a real estate investment expert from Snellville, Georgia. He achieved success in real estate wholesaling through strategic networking, market analysis, and deal sourcing. Starting as a security guard, he transitioned into wholesaling vacant lands. This transformed his side gig into a full-time career. It improved his life and that of his daughter.
Vayna Jerabek says that real estate wholesaling is worth it. At 22, she is reportedly making up to $100,000 a month. By using her existing knowledge and networking skills, Vayna focused on wholesaling. She generates quick profits with no significant capital investment. Now, she uses various real estate strategies like house hacking and rental investments.
Vayna is a real estate investor and founder of Wholesaler Academy. She transitioned from a realtor to a wholesaler because of lucrative market opportunities. Vayna changed her methods by switching her cold-calling script to target off-market properties. This led to her first major wholesale deal, which netted $40,000. In a YouTube video, she attributed her success to her mentor, Scotty Adrock Tymczyszyn. By reinvesting her profits into direct mail campaigns, Vayna scaled her business quickly.
Doug Turner shares how starting wholesale real estate is worth it. You just have to learn from experienced individuals and reliable resources. He watched YouTube videos and participated in live calls with the AstroFlipping community. Doug developed a deep understanding of neighborhood trends and property values. He made offers on Multiple Listing Service (MLS) deals, even with time zone differences and poor internet connectivity. His persistence paid off when he secured his first contract. Doug eventually reached $10,000 in monthly earnings.
Doug started his real estate wholesaling journey while in the military. Despite being deployed in Iraq, Doug dedicated his free time to learning wholesaling. He began by immersing himself in local real estate markets. After returning home, Doug scaled his business, Big Country Properties. He completed successful deals while balancing a full-time career in law enforcement and the military.
Pros and Cons of Wholesaling Real Estate
Pros
Good Entry Point to Real Estate. Enter the real estate industry with minimal financial resources and experience. Determine if real estate is right for you.
Valuable Skill Development. Cultivate relationships with cash buyers, investors, realtors, and other wholesalers. You’ll improve your communication, negotiation, and networking skills.
Quick Money-Making Potential. Recoup your real estate investment quickly. Receive your profits upon closing deals.
No Real Estate License Required for Wholesalers in Most States. You’re only selling the right to purchase a property, not the real property.
Low Risk With Minimal Upfront Investment. You’re not required to purchase the properties. You can take part in this business venture even with no credit (good or bad) and limited capital.
You are Your Own Boss. Wholesaling grants you flexibility and autonomy over your work. This is good for personal and professional growth.
Cons
Unpredictable Income. Your income depends on finding motivated buyers and sellers. There will be times when you can’t find available properties or close deals. This usually happens to beginners who don’t have a list of quality buyers yet.
Networking Skills Required. Negotiating favorable deals with property owners will be challenging.
Not a Passive Income Stream. Wholesaling houses does not offer long-term profit. Once you’ve completed a wholesale real estate deal and made a profit, you have to start the process all over again.
Highly Competitive. The real estate market has many wholesalers within the same cash buyer pool. It's difficult to stand out as a beginner.
Can Wholesaling Real Estate Make You Rich?
Wholesaling real estate can make you rich and offer six figures in assignment fees per year. Successful full-time wholesalers often report earning between $50,000 to $100,000 annually. Top earners claim to make over $500,000 per year. But it’s not easy, especially for beginners. Your success depends on factors like market conditions, skill, and effort. You’ll need solid knowledge of your local real estate market. As a wholesaler, you must consistently find deals, build strong networks, and scale your operations.
You can grow your income to six figures by:
Wholesale real estate is profitable in 2024 because of the high demand for properties and the minimal costs needed to make quick profits. Digital tools make it easier to find distressed properties. These include Foreclosure.com and Auction. Use platforms like Trulia and Zillow to connect with potential buyers. You can make $2,000 to $30,000 per deal in real estate wholesaling. Even if you only close 2-3 deals a month, you can earn up to $45,000. According to REISift, wholesalers can expect to earn an average of $5,000 to $20,000 per deal. In more competitive markets, profits exceed $30,000 for a single transaction.
This real estate wholesaler on Reddit revealed how he made $10K-$15K from each closed deal. You don't need to spend money. And, you can work on multiple deals in one go.
It costs nothing to start a wholesale real estate business. Most people begin wholesaling without startup capital or prior experience in the industry. However, you may encounter some expenses as your business grows. These include marketing, appraisal, legal, and administrative costs.
Also, not every deal will yield a $10,000 to $15,000 wholesale fee. Some deals generate lower profits, while others bring in higher returns. This depends on your ability to find profitable opportunities and how fast you sell a property.
This Redditor took 8 months of cold calling through a Mojo dialer to find a high-value buyer. He closed his first wholesale real estate deal with a $27,500 net income. Eventually, he earned $360,000 by the end of his first year.
It takes 3 to 12 months to make money with wholesale real estate. It starts with closing your first deal and ends with assigning the purchase contract to a buyer. Many real estate “gurus” and influencers claim to profit from wholesaling in just 10 to 30 days. But this isn’t realistic. Experienced wholesalers close deals within a shorter timeframe. However, beginners take longer to establish themselves and make a profit.
Many successful real estate investors don’t rely on wholesaling to build long-term wealth. Instead, they use it as a stepping stone to fund other ventures. Some examples are fix-and-flip properties and long-term rental investments.
How Hard is Wholesaling Real Estate?
Wholesaling real estate is extremely hard for beginners with no experience. However, experts find it easy because of their years of experience. But wholesaling real estate takes a lot of work. Some crucial aspects that you’ll spend most of your time on include:
This Reddit user doesn't recommend wholesale real estate because of its disadvantages. It involves aggressive sales, high costs, and extensive time requirements.
Real estate wholesaling is less risky compared to other real estate investment strategies. It requires less capital, as you don't need to purchase the property outright. However, it still carries its own set of challenges:
Is Wholesale Real Estate Better Than House Flipping?
Wholesale real estate is better than house flipping because of its lower risk profile and capital requirements. You don’t have to buy the property you’re wholesaling. Alternatively, house flipping requires more work because you’re repairing properties. You need to have an initial investment to increase a property's value.
Real estate wholesaling offers more flexibility. You'll handle multiple deals at a lower cost. Wholesalers avoid property ownership and renovation costs. This leads to quicker deal turnarounds and easier scalability. This business model has minimal overhead and a simpler exit strategy.
House flipping involves purchasing properties below market value. You rehabilitate and sell them at a markup, usually to rental property investors. This business model has a high financial risk, volatile markets, and time constraints. It is stressful, competitive, and has tax implications. Plus, holding costs accumulate during renovations.
While flipping can yield higher per-deal profits, wholesaling's time efficiency and reduced financial exposure are more attractive to many. However, the ideal strategy depends on individual goals, resources, and risk tolerance. Both models have merits in the real estate investment landscape.
Is Wholesaling a Good Real Estate Side Hustle Idea in 2024?
Yes, wholesaling is a good real estate side hustle idea in 2024 because of economic volatility and rising interest rates (around 6%-7%). This creates opportunities for real estate wholesalers to avail of cash-financing options. According to CBS News, home sales are down by 18.7% from 2022. This increased the number of distressed properties in 2023. It is further evidenced by a 2% increase in foreclosure filings.
Another reason is the aging U.S. housing stock, with 65% over 30 years old. This provides a target market for wholesalers, connecting investors with properties needing renovation. This aligns with millennial homebuyer demand for move-in-ready homes.
Is It Worth It To Enroll in Wholesale Real Estate Courses?
It is worth it to enroll in wholesale real estate courses if you join reputable programs with experienced mentors. Some well-known courses include Lex Levinrad’s Wholesaling Real Estate Boot Camp and Peter Vekselman’s Default Deals. They can speed up your learning curve, provide valuable resources, and boost confidence. These courses also offer structured learning, expert guidance, and networking opportunities. You can find most of the information you need from online articles, videos, and forums. It is where experienced investors share their knowledge and insights. However, there are disadvantages to some of these real estate wholesaling courses. These include:
Why Local Lead Gen is More Worth It Than Wholesale Real Estate
Local lead gen is more worth it than wholesale real estate because there's higher recurring revenue potential. Plus, it's scalable and requires low startup costs. Wholesaling real estate is a good idea if you have a strong understanding of your local market. It is for you if you enjoy networking, negotiation, and aggressive sales. However, real estate wholesaling has a more competitive market. According to House Grail, around 29% of real estate investors paid more than the asking price of their target properties. This shows the intense competition in the real estate market. It takes more time to get an ROI with wholesaling properties.
Local lead generation is less competitive because you're only dealing with local niches. It's easier to secure clients because you're generating leads that small businesses need. So, you'll have more demand. Ask for competitive offers to enjoy recurring income with less maintenance.
The local lead gen business model entails making niche websites for local services. You have to rank them organically on search engines like Google. Once your sites rank on the first page, generating leads will be effortless. I know because I've been in this industry for over 10 years. I have also tried investing in traditional real estate. Unfortunately, I quit because it was time-consuming and highly competitive. So, I used local SEO to rent out websites that generate over $50,000 in passive income monthly.
Local lead gen is location-independent, carries less risk, and yields faster results. With this business model, you forgo strategies like cold calling, door-to-door sales, or driving for dollars.
