One way to get involved with real estate investing is through wholesaling, which is purchasing a property wholesale and selling retail. The concept of flipping houses is not very popular these days but basically you’re just wholesaling. What you’re doing is buying at a discounted price and than reselling it in a short period of time. Scouts, dealers and retailers are the different types of people involved in wholesaling.
An inexpensive way to get involved with investing in real estate is as a scout or bird dog. A scout or bird dog is someone who gathers information, locates potential deals and then sells the information to other investors. When you become a scout, very little knowledge or money will be required. The scout will locate distressed properties, gather the information and then present it to another investor for a fee. With all the foreclosures happening there are many deals for a scout to locate. A scout generally gets paid $500 to $2000 on each lead he provides to an investor depending on the price of the property and the potential profit.
A dealer will locate a distressed property and enter into a contract with the owner. Dealers sometime buy properties wholesale and then sell it retail or sell the contract to another investor. Being a dealer is more risky then being a scout because dealers put down their own money to secure the deal. A dealer doesn’t have to deal with tenants and can make a larger income with out having to fix up the property.
What a retailer does is buy properties from dealers. Retailers fix properties up using their own money, therefore assuming the greatest risk but also receiving the greatest profit.
I hope I’ve given you something to think about. You don’t need a great deal of money to get into this business, just a little nerve to make phone calls.
Hans
