The Wholesaling Real Estate Option

When it comes to investing, an interesting question can be posed: is earning a 3% return on an investment worthwhile provided it is virtually guaranteed? For many people, such a return would not necessarily be worthwhile and they would prefer to take their chances with a riskier venture that comes with the higher rate of return. Hence, people invest in the stock market as opposed to dumping all their money in a checking account. Now, in real estate there is a unique method of low interest/high reward investing as it is known as “wholesaling”.

What wholesaling refers to is purchasing a block of property and then selling the properties at a low profit. This may seem like a less than worthwhile venture on the surface, but when one looks at it closely it is clearly a solid plan. The profits are then maximized in terms of the volume of the sale. For example, if one purchases 15 residential properties and then sells the properties at a $4,000 profit per property the profit will accumulate at $45,000. Certainly, that is far from a bad deal! In fact, it is one of the safer large scale investment plans available and can turn into a potentially lucrative investment.

Of course, this is hardly an investment strategy for one who is limited in terms of available capital. To purchase 5 or more residential properties simultaneously is hardly an option for one who can not afford them. But, for an aggressive individual with a lot of capital this could prove to be a wildly worthwhile investment.

Are There Ethical Dilemmas in Real Estate Investing?

It would be next to impossible to ignore the news reports of the current mortgage crisis. After all, the number of homes that are being foreclosed upon is now in the range of millions and that surely has gotten the publics attention. It has also widely opened the doors for real estate purchase and investment opportunities as a great deal of property can now be purchased at relatively lower market values. There are some individuals, however, who may feel certain qualms about purchasing homes during foreclosures as this may seem like taking advantage of a downtrodden person. Such an attitude it not necessarily correct.

A foreclosure simply means that a mortgage has been defaulted upon and the lender is attempting to recoup their money through seizure of the property. While there are definitely some heartbreaking tales associated with foreclosures the fact remains that a foreclosure – much like the initial home purchase – is a business transaction. Banks simply can not lend out money that is not going to be paid back. As such, the inclusion of a buyer of the foreclosed upon property is simply another link in the chain of these business transaction. If the person buying has not been involved in any unethical dealings associated with the foreclosure of the property then the buyer is not doing anything wrong. As a matter of fact, the buyer may even prove helpful as the influx of sales cash can be used to pay off a large part of the remaining mortgage. So, do not let public sentiment designed to sway emotions towards a federal bailout put you on a guilt trip.