Mastering the art of bargain hunting and flipping is important to succeeding in wholesale real estate. You need to be able to spot great deals and convert them quickly if you want to earn in this business. You need to recognize a bargain price when you encounter one and you need to have a ready buyer waiting in the wings in order to unload the property quickly before it become lower in value. Because you are dealing with multiple properties, you will be dealing mainly with banks and lenders, and investors and developers. It is important to differentiate between the two as the aims of the two groups are different. Banks and lenders will be looking to unload properties which they have been forced to foreclose on so they may be more willing to sell at a lower price. Investors and developers on the other hand are looking to buy properties on a bargain, so it is important that you give them enough spread to make a profit but still earn a respectable profit yourself. If you can successfully bridge the gap between the two groups with a relatively healthy profit, then you're on your way to a successful career as a wholesale real estate agent.
Real estate wholesaling is basically bargain hunting. You go out and look for cheap properties in order to pass on those properties to an investor. The main motivation for buyers of wholesale properties is that they get the properties at a discount from which they can then make a profit later on. Your job is to make those buyers a profit by finding properties at a bargain price enough to produce a profit both for you and for the buyers. Of course, for the properties' sellers, their main motivation would be liquidity. As said above, your main source of bargain properties would be banks and lenders. Sometimes, you will also encounter the occasional homeowners who need to sell their property quickly. These are sellers who are either in need of quick cash or are relocating to another place. These sellers can be convinced to lower their selling price if you recognize how urgently they need to sell off their properties.
Once you build a stable list of contacts, both for buying and selling, real estate wholesaling will be easier for you. The hardest part in wholesale real estate is building those contacts though. When you are just starting out, you may find that most of the big sellers and buyers have already been cornered by established wholesale real estate agents. Your main goal therefore is either to look for new buyers and sellers or pirate those buyers and sellers away from their usual agents. Looking for new buyers and sellers is hard but is the more honorable way of doing business. Pirating established buyers and sellers though is easier but requires a more cutthroat attitude. Whichever of the two you do decide to employ, what is important is that you conduct your every transaction legally and faithfully to ensure you build your reputation and avoid getting into any trouble.