A Wonderful Way to Build Wealth Quickly and Easily …. Cash Flowing Wholesale Purchase Deals!
With the Wholesale Purchase Contract House Flipping Strategy, the idea is to at least get enough equity to assure a maximum cash flow position, or even prep the house for a flip. After holding the property for six months to a year you may be able to refinance and pull cash out to put in your pocket and use to acquire more property for your portfolio.
What is a Wholesale Purchase and How Does it Work?
The Wholesale Purchase Profit Model is an effective way to acquire a property at a discount and build your portfolio of income producing property. In a traditional wholesale purchase transaction, your objective would be to simply buy a property at the lowest (wholesale) price and keep as much equity in the property as possible. You then to either hold the property and rent it out for cash-flow, tax advantages & equity appreciation, or you would sell it to a third party at a higher price and pocket the difference as a cash profit.
You should use the Wholesale Purchase Profit Model to purchase a property you intend to keep, either as a personal residence or rental property. It differs from a traditional purchase in that it is structured so you can purchase at a discount and have a good equity position from the start, which can give you increased cash flow and increased profitability as the property appreciates.
You could use Private Financing when you want to legitimately and safely hold the property without obtaining bank financing. The goal with a Wholesale Purchase is to own a property as inexpensively as possible so as to maximize your long term returns. The Wholesale Purchase is ideal for the traditional investor who wants to buy a discounted property and enjoy maximum cash flow and long term appreciation..
For a Wholesale Purchase your mission is to:
1) Find a motivated Seller of a property in relatively good condition with enough equity to make the deal work (Use Rehab and Rent if the property needs significant rehabbing and you plan to keep it).
2) Make an offer and negotiate the best price you can. It should be less than 70% for hard money financing, 90% of market value for private financing, and 80% for traditional bank financing.
3) Put the Property under contract.
4) Get your financing together.
5) Close the transaction and take possession.
Typically, the Wholesale Purchase can be structured with a simple Sales Contract and Addenda, making it one of the simplest of all the Profit Models. Plus, since you are targeting distressed sellers with property that needs little to now repairs, you will also find it one of the easiest strategies to work. I have done several Whole Purchase deals that have made me tons in positive cash flow, and has the market recovers, they also give me nice profits down the road. In short, the Wholesale purchase model is one of the easiest ways to build long term wealth and financial security.