Does it make sense for buy and hold real estate investors to engage in wholesaling houses at the same time?
Real estate wholesalers and rental property owners are often found at each other’s throats in heated online debates. Both sides frequently bash the other and criticize their real estate investment strategies. So is there any happy medium in which property investors can engage both tactics at once, and what could the benefits of it be?
Wholesaling houses is considered the superior investment strategy in many ways today, and has proven to be a highly profitable long term strategy for many investors.
The benefits of wholesaling houses include low risk exposure, easy entry, rapid re-capitalization, high profit margins and more.
Many buy and hold real estate investors aren’t comfortably with flipping because they simply don’t understand it, or have been thoroughly brainwashed by real estate investing gurus selling them courses and coaching that focuses on building rental property portfolios.
There are certainly great incomes and even significant wealth to be had from buying and renting out homes. However, that doesn’t mean that being a landlord and managing rentals doesn’t come with many challenges and potential issues too, especially for newbies, but even in terms of cash flow shortages for veteran investors too.
Wholesaling houses can be an excellent why to augment a buy and hold property strategy and fill in the gaps. More than that, it is actually one of the best ways to shore up leaks and truly maximize all income opportunities and profit margins.
Wholesaling houses compliments rentals by providing critical lump sum of cash in the short term which can be used to expand portfolios and fund rehabs without taking on debt, to obtain better bargains on acquisitions and fill in until larger volumes of cash flow can be built up.
The beautiful thing is that is doesn’t take much effort to add flipping to the mix. For many it is just a matter of wholesaling the homes that they are already coming across and would otherwise leave to be wasted.
Leads aren’t cheap today. So if it is simply a matter of inking a contract and passing the deal onto another hungry investor for a fair amount of compensation, why not? At a minimum this could pay for all other lead generation and marketing activities and help to build referral relationships to receive the favor returned in the future.