Is It a Good Time to Buy a Real Estate Franchise?

If you are considering building a real estate business, you should consider real estate wholesaling. What is it, how does it work, and what is the profit potential?

Spotlight on Real Estate Wholesaling as a Joe Homebuyer Franchisee

In our last article, we discussed why now could be a great time to invest in real estate. We examined how:

  • Today is very different from 2007/8, despite the current fragile economy

  • Monthly rents are increasing fast and supporting good cash flow

  • Supply and demand are more balanced today

  • Interest rates are still low, and conducive to profitable investment

But direct investment into residential property is not the only way to profit from real estate. If you have an entrepreneurial flair and want to start a real estate business, there are many top real estate franchises in which to invest in the U.S.

A real estate investment strategy that is good for all seasons is wholesaling.

What is wholesaling in real estate?

A real estate wholesaler helps people to sell their homes quickly. The wholesaler agrees on an acceptable price with the seller and agrees on a temporary contract to sell the property on the seller’s behalf. Any profit made on the sale price (the difference between the contract price and the actual sold price ─ also known as the ‘spread’) is retained by the wholesaler. Often, the buyer will be a real estate investor.

Why wholesaling real estate makes good business sense

There are many reasons why real estate wholesaling could be an ideal business opportunity for you – especially in a tougher real estate market (though the strategy works equally well in good markets).

For example, you don’t need a huge amount of upfront investment for each property you wholesale. Unlike direct property investment, you don’t buy the property to own (either with cash or an expensive mortgage). Instead, your investment is in time and effort to market your services.

You could also make sizeable profits in a short space of time. Agree on a sale price of, say, $150k and sell for $175k in four or five weeks… you can do the math!

These deals are ‘off-market’. Therefore, they’re not really affected by the economy. You’re helping people who must sell quickly, and who don’t have the time or inclination to sell through a traditional real estate agent.

As interest rates move higher, history shows that houses stay on the market longer, because people won’t be able to borrow as easily to purchase a new home  – and that’s good news for wholesalers.

Why do house sellers use wholesalers?

There are always homeowners who need to sell their homes quickly (AKA as distressed properties). For example:

  • It may be a property left to children or grandchildren, who don’t wish to own the property but need the cash

  • The sale may be forced by a life event, such as a divorce in which the couple simply wants to rip off the band-aid

  • The owner is behind on the mortgage and wishes to sell before the bank forecloses

Of course, as with any business, real estate wholesaling isn’t always straightforward. You’ll need to find properties to wholesale, and maintain lists of potential cash buyers. But you don’t need to have real estate investing experience, and, in most states, you won’t need to pass exams or be licensed (though you should always check with an attorney).

Welcome to Joe Homebuyer

Setting up as a real estate wholesaler can be challenging, but becoming a Joe Homebuyer franchisee makes life much easier. They will help you with essentials such as:

  • A great website that attracts sellers and buyers

  • Training to hone your skills toward securing the best distressed property deals – you’ll learn how to profit from assignable contracts, fix-and-flips, and long-term rental investment

  • A proven system, with more than 50 franchisees across more than 20 states

  • A defined market territory in which to build your business using the Joe Homebuyer reputation as your foundation

  • A system that helps you to pair buyers and sellers

  • Help from other Joe Homebuyer franchisees and business coaches when you need it

  • Great marketing to support you in finding the right deals

If you are considering building and owning a real estate business that provides multiple potential profits and income streams, provides full training and support, and is easily scalable, then a Joe Homebuyer could be ideal for you.

To learn more, start your journey by taking our 5-minute franchise aptitude test today. It’s the first step to success as a franchisee.

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