Photo courtesy of Flickr
By Jason M
Selling homes is one of the best ways of generating full-time income throughout the year. Contrary to popular belief, you don’t need a real estate license to sell homes. As a real estate investor, you can buy and sell homes for profit at will.
How can I buy and sell homes without a real estate license? This is the first question that’s typically asked by people who would like leave their full-time job and secure financial independence. In this article, we will take a look at two real estate investing strategies that can help you do real estate deals without a Realtor’s license.
There’s a strong possibility that you have seen signs stating, “We buy houses for cash.” These signs are posted by wholesalers. Wholesalers are real estate investors that specialize in searching for distressed properties.
Distressed properties fall into the following categories:
-The home owner is behind on property taxes
-The home owner is facing foreclosure
-The home owner lost their job
As a wholesaler, you get the property owner to sign an agreement that gives you the legal right to buy their home below its market value. In this instance, you will not buy the property. You will sell or assign your contract to another investor for a fee. With wholesaling, you can get into a deal, and out of a deal without any long-term commitment to the property.
Wholesaling is an easy way for you to make $2,000 to $5,000 per deal. Please keep in mind that you must leave the lion’s share of the profit to the investor taking over the deal. If you work hard, you can do several wholesale deals per month.
Here’s a simple wholesaling formula that can help you excel with this real estate investment strategy:
-Market Value of the Home x 70% – Rehab Costs = Your Offer to the Property Owner
Rehabbing (Fix and Flip)
Rehabbing is one step above wholesaling. This is where you buy a home below its market value, fix it up, and sell it at its market value. You can make $10,000 to $25,000 per deal. It’s more lucrative than wholesaling, but it requires more work.
You need a team to be successful with the fix and flip strategy. You need a mortgage broker, a good title company, and a reliable contractor. Let’s look at the role of each team member.
Mortgage Broker – You cannot rehab homes without capital. Your mortgage broker will give you direct access to hard-money loans and private money.
Title Company – The title company will take care of the paper work and transaction when you find a buyer for the home.
Contractor – The contractor’s crew will rehab or fix up the home.
You must be patient and prudent while doing a rehab project. It could take three to six months to find a buyer for your home. You can hire a Realtor if you would like to speed up the process. The Realtor will market your home and list it in the MLS.
Real estate investing is a sure-fire way of becoming financially independent. Fortunately, you don’t need a license to become a real estate investor. Real estate investing is not a get rich quick scheme. You must work hard if you want to be successful.