In the real estate industry, wholesaling is a wonderful activity for newbies and pros alike. Of course, most people in the business know this! But to outsiders, wholesaling can seem challenging.
That’s understandable, after all. In many cases, multiple transactions need to happen at once. But the main thing you should be asking yourself is: how much money can I make?
Well, if you don’t know the answer, consider yourself lucky, as we do—and we share it in this post! Let’s get right into it!
How Do Real Estate Wholesalers Make Money?
1. Assigning A Contract:
Concept: After securing a property at a fixed price under contract, the wholesaler assigns the contract to a buyer—for a fee, of course.
Source Of Profit: The difference between the price paid and the contract’s sale price is the wholesaler’s profit. For instance, a wholesaler earns $12,000 if they sell a propertyfor $112,000 that they got under contract for $100,000.
2. Double Closing:
Concept: After purchasing a property from a seller, the wholesaler quickly turns around and sells it to a buyer, usually on the same day.
Source Of Profit: The difference between the price they paid and the price they sell for is their profit.
3. Back-To-Back Transaction:
Concept: This is essentially another way of referring to a wholesale real estate double closing. Basically, the wholesaler buys a property from one party and then sells it to another party.
Profit Source: Again, a wholesaler’s profit is the difference between what they paid and what they got from selling.
4. Transactional Lending:
Concept: A wholesaler might use transactional lending to do a double closing. Essentially, they borrow funds for a short period, usually just 24 hours, to purchase a property and then repay the loan after the property has sold.
Profit Source: Yet again, the profit is the difference between what they bought the home for and what they sold it for. However, they’ll have to pay a fee, or interest, because they borrowed money.
How Much Can You Make From Wholesaling Real Estate?
The answer to this question depends on several factors. For example, the people who’ve been doing this a long time tend to make more than the inexperienced newcomers. That said, here are some figures to consider:
- Average annual income: $106,453
- Low end: $92,396 annually
- High end: $122,241 annually
These figures relate to wholesalerswho are employed by companies—not solo operators. Solo wholesalers might earn much more or quite less.
How Much Can Real Estate Wholesalers Make?
Consider the points below:
- If you work for a real estate firm,you can make between $90,000 and $120,000 per year.
- As a solo operator who works part-time, you can earn around $250 per hour or $10,000 per month. This is if you do at least one deal a month.
- If you have a team generating leads on your behalf, your business can grow significantly, which will mean greater profits.
How To Increase Your Earnings As A Wholesaler
- Increase your assignment fee
- Do more deals
- Try reverse wholesaling
- Qualify your leads with better marketing
Final Thoughts: Is Real Estate Wholesaling A Good Career?
Looking for a simple and slightly less risky way to enter the real estate market? Wholesaling real estate is the answer, as you can do it with little to no capital. Especially if you have an eye for distressed properties that can be beautified, you should do well. If you’re ready to jump into the world of real estate wholesaling, contact DoubleClose.com. We offer 100% same-day transactional funding that you can use to close your next deal—and with no upfront fees! We work with real estate wholesalers across the nation, and we fund deals without any lower or upper limits! No credit checks and no hassles. In short, we’ve got the best transactional funding around!