Real Estate Wholesaling vs. Flipping – What the heck is the difference? The difference between wholesaling and flipping has to do with the exit strategy of your deal.
There are some people that feel these two words are the same, so let me explain my definition of each.
When I think of wholesaling the following come to mind:
• Less stress
• Less Money get it retail ready
• Less people involved
• Less time
• Less risk
• Less potential lawsuits
• Less fear
• Less dependency on others to do their job
• Less money holding the house
• Less headaches
Wholesaling is when a house is put under contract and that house is sold as-is to most likely an investor. The house isn’t rehabbed and sold to the retail market.
If selling to a Seasoned Investor, there is far less people involved when you are wholesaling a deal. You don’t have to worry about the following as much as you would if it was being flipped to the retail buyer:
• Time Management
• Contractor Management
• Contractors Paperwork
• Budgets
• Appraisals
• Inspections
• Rehabbing
• Marketing
• Staging
• Market Risks
• Market Shifts
Wholesalers – if you truly want to cut out the most amount of people and the biggest time delays, sell to seasoned investors. In many cases, most seasoned investors aren’t paying for inspections, appraisals, and getting estimates because they have enough experience to see what is wrong with the house and know how much it costs.
“Sometimes people take a wholesale deal, and put it on the MLS and end up selling it to a retail buyer as a flip. Most likely, and not in all cases, you will have the house tied up for months due to the loan process, and retail buyers are easily scared because they have an unrealistic view that there should not be anything on an inspection report. Inspectors are paid to find stuff wrong. I can promise even new construction homes and rehabs have stuff on inspection reports.”
In my opinion, with most wholesales, you are giving up the lions’ share of the profits, BUT it so much quicker especially if you are selling to an experienced investor. If you don’t have money to buy the property, pay for utilities, insurance, Attorneys fees, taxes, closing costs, etc… consider wholesaling.
Delinda has bought and sold over 150 properties, been involved in hundreds more through consulting, mentoring, and coaching. It doesn't matter if you are burnt out, new to the game, a lousy rehabber, seasoned, successful or just plain curious, I encourage you to learn about the wonderful opportunities real estate investing can offer people. I am sure not the sharpest tack in the box, so if I can do it, you can, too.
As someone who just beginning to learn about all of this, I actually found this easy to follow. I’m not the sharpest tack either, so I appreciated the simplicity. 🙂
Oliver,
Thank you for sharing your thoughts! We are happy to know that you found this easy to follow. I am sure you are sharp and hope you join us in the future for some of our classes. Delinda makes things very easy to follow by using real life situations that will really stick with you. Since Covid-19 we have not been able to hold any events, so if you would like to sign up for future ones, please do so. We look forward to seeing you in the future!