Thread: Why Some Investors Prefer Wholesaling Over Flipping

Wholesaling and flipping houses are both real estate investing methods and are almost similar to each other. Both methods are buying and selling quickly for profit. However, a wholesaler only “owns” the property through a contract and then assigns the contract to a buyer. In flipping houses, an investor actually buys the whole property.

See the difference? Now let’s weigh the pros and cons.

When you flip a house, most probably you’d be fixing it up to make it more attractive to a buyer. You will have to maintain the property in order for it to sell. You will need money to finance all these. In wholesaling, there is no need for a big investment cost. Since a wholesaler does not actually buy the property, he won’t need money for its maintenance. Along with investment costs, wholesaling may not require an investor to obtain a loan.
Wholesaling does not require much work and effort unlike flipping houses. You won’t need to do repairs or upgrades on the property which can save you more time to do something else. And since wholesaling only takes a little time to sell properties, moving to another wholesaling project is easier. Flipping houses require you to work on the property regularly. You cannot move to another house unless you’re done with the first one.

Wholesalers can earn bigger profits than flipping at a shorter period of time. Flipping a home takes more than a month, while wholesaling can be done in just weeks. Although earnings of a wholesaler range between $5,000 and $20,000 only, he or she can have bigger profit just by having many properties to sell.

Investing in real estate takes time. Do not rush or you might end up in the dumps. If you’re going to make a career in either wholesaling or flipping houses, be sure to seek the help of a professional investor.