Flipping or Wholesaling: Which is Better?

When it comes to real estate investing, two of the things you’ll always hear is flipping homes and wholesaling houses. Although many people confuse one for the other, they are quite different and each of them has its own pros and cons.

Basically, flipping homes is the act of buying and quickly selling a property for profit. Wholesaling houses, on the other hand, is the process of placing a property under a contract and assigning the said contract to another buyer, who will close transaction. Between the two, the former is probably more popular as many people are familiar with it.

To succeed in the business of flipping homes, you must be prepared to spend a considerable amount of cash. Because you need to buy an investment property that you could resell at a higher price in the future, you could secure loans to ensure that you’ll be able to finance your business.

If you manage to transform an undervalued property to a great-looking home and sell it at a higher price, you’ll definitely earn a huge amount of cash in just a short time. You’ll be able to recoup the cash you have invested earlier plus earn a big pocket money.

Its downside, however, is that it could take some time before you resell a property. In addition, it is not guaranteed that you won’t encounter mind-numbing problems in the long-run, even if you have succeeded in your first flip.

Meanwhile, wholesaling houses offer investors the opportunity to earn cash without making big risks. Since you’re not really buying a property per se, you don’t have to spend a huge amount of cash to get you started in this business. You also don’t have to secure loans because all you have to do to make it big in this business is to find a lot of motivated sellers who are willing to place their property under contract.

But then again, this form of real estate investing is not foolproof as you’ll earn less compared to buying and fixing undervalued properties. You might also face difficulties when finding buyers for the contracts that you have acquired.

A piece of advice though. Choose the method that is right for you. In addition, do some research before being involved in real estate investing. With patience, hard work, and perseverance, you will succeed in this industry no matter which type of investing you’ll choose.

To learn more about real estate investing, visit Rehablist.com. The web site features valuable tools that can help an investor make it big in the housing business.