1.1 of 10 How to Make Money Wholesaling Real Estate

Like I explained in Part 1 "How to Wholesale Real Estate" making money through wholesaling has little risk and potential high rewards. Remember, you don't have to use your own money nor do you need to take on any large loans. You simply need to find the deal and find someone who wants the deal. Doing those two things will make you as much money as you want. You can do it over and over and over again. Find the deal and find somebody that wants the deal. Very simple.

Now there are two primary ways to make money through wholesaling. Both consist of doing the two things mentioned above but there is one major difference. One makes you a lot of money and the other doesn't. Wholesaling is also known as "Bird Dogging." More precisely, someone who is a Bird Dog is a wholesaler. Though a wholesaler is not necessarily a Bird Dog. A little confusing but let me explain.

A bird dog is someone who is more or less "hired" to find deals. An advanced real estate investor will have multiple bird dogs working for him in areas where they would like to purchase a property. Bird dogs get paid a fixed amount of money, and usually have negotiated this before they ever start looking for a property. Basically, an investor will promise to pay anywhere from $500 - $2,000 to the bird dog if the deal closes. Because a bird dog finds deals and gives them to someone who wants them they are essentially a wholesaler. Being a bird dog has it pros, but if you are going to do all that work then you should get paid accordingly, or at least I think so. Why settle for $500 when the investor turns around and makes $20,000, $30,000, or $50,000.

As a wholesaler you are becoming a true middle person by taking part of the margin just not a finder's fee. Let me break it down with an example. Let's say you find a pre forclosure you can buy for $100,000. After a some minor improvements ($5,000 worth) the property's resell value is $150,000. That makes the profit margin $100,000 + $5,000 and then subtract that from the $150,000 sell price. This means your profit margin would be $45,000. As a bird dog you would have already negotiated to make $1000 for providing the investor a deal like this. This means after paying you, the bird dog, the investor will make $44,000. Not bad for not having done anything except closing on the deal. Now as a true wholesaler let me show you how you can really profit.

Let's say you find the same property, do all the research, but instead of just turning it over to the investor you actually get the property under contract in you name at $100,000. You now have 30 days to find someone to buy the property. You already know the investor that was looking in that area so you call him/her up and say I have a property under contract it is worth $150,000 after $5,000 worth of improvements. I will assign the rights to this property to you for the price of .....you decide. It could be $110,000 or $115,000 or $120,000 leaving you with $10,000, $15,000 or even $20,000 in profit. The investor is still happy because they will make $25,000 - $30,000. The only difference, and its a big diference, is that instead of only making $1,000 you will make 10 times that. Very very powerful!

Now tell me. Why would anyone ever settle for just being a bird dog. You are already doing the same work...just get that property under contract and you will make some big dollars. No bird dogs...be a wholesaler through and through.

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