Wholesaling is where an investor buys a property in foreclosure at a low price - then sells the property at a slightly higher price for a profit. With banks negotiating to new low levels, my investors have been able to take advantage of this unique opportunity. At Chase Real Estate we have a simple wholesaling system that works.

The system starts with identifying substantially undervalued real estate that is in fairly decent shape. By decent shape, we mean a few mechanical issues but mostly cosmetics. Chase Investor purchases property for $100,000. Once closed, the rehab team cleans out property and repairs/turns-on all utilities ie. furnace, water and electric. (All of our foreclosed homes have their utilities turned off)

We find that “regular” buyers are very nervous when purchasing a home. The key items of concern are structural and mechanical issues. As a wholesaler, it is our job to make the property a bit more habitable. This not only helps the buyer feel more comfortable but also the bank who is making the loan for the new buyer.

At Chase Real Estate we are working with numerous buyers who are looking to purchase homes under market for their personal residence. Using the wholesaling technique we are able to offer these buyers a number of real estate products not available to the general public. First, when a buyer calls us looking to purchase a home we will provide them with your home that is in need of repair. Most homes will need $5,000-$35,000 in repairs (This is a 203K loan from FHA). We inform the buyer of the ability to buy this property with a low 3 1/2 percent down payment. Then, this is where it gets really good, the buyer can finance all the repairs in this loan. Kitchen cabinets, stainless steel appliances, granite counters, carpet, paint, hardwood floors, roof, bathroom remodeling etc….

Here is how the numbers work: Chase investor purchases the home for $100,000, then completes a few repairs and clean-out lets say $2,000. The investor prices property for $120,000 sold ”AS-IS”. The home repaired will appraise for $150,000. This allows the new buyer to finance $30,000 for repairs. It is that simple. The only hitch is a short seasoning of title. From the time the investor purchases the home to the time the new buyer purchases the home must be a least 90 days. This is a great way for investors to make money buying and selling using a technique that works in every market!

This entry was posted on Wednesday, December 3rd, 2008 at 5:00 pm and is filed under Foreclosure News . You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.