Wholesaling real estate is a tough business, but it is less risky than investing. Regardless, that does not mean 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 each and every stage of the operation, you will find this line of work highly profitable.
Whether you’ve started in the industry or have already been in business for years, I’m here to share 5 common setbacks that wholesalers make that you should avoid, as well as ways to prevent them from happening.
Don’t overload
I understand that you just want to earn more. But if you are making unnecessary charges on a deal, then you should reevaluate your contract. Don’t get too greedy in one deal. Instead, focus on sealing more deals and generating more from them.
Don’t get property contracts that are too high
The same goes for registering overpriced properties. If you, as a buyer, would not accept it because of the high cost, then do not get contracts that come with an exorbitant price tag.
Don’t underestimate the 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.
Do not overestimate the post-repair value (ARV)
The ARV calculates the future value of an impaired property once it has been repaired. After completing the renovation work, you need to consider the purchase price and renovation costs to get a more accurate sales price.
Knowing the ARV of a property and how to calculate it will help wholesalers and hobbyists see if there is enough space for the lot to be profitable.
Give a good presentation
You see numbers after numbers without having a clear idea of the property. How do you give a more accurate and reasonable estimated value to that? Of course, you do your research. I suggest you attach photos and a video. This helps the decision process to be faster and closer to the ballpark figure.
You will learn and grow as you go through the real estate wholesaling journey. The sooner you figure out how to avoid these mistakes, the better it will be for your business and for your customers.