Posted by Rob Aston (PA) on February 17, 2002 at 09:44:17:
Wholesaling: selling houses - way below retail cost
(FMV - Fair Market Value)
If you buy foreclosure properties, they are sold for a very reduced price. Most banks are selling them at these prices so they can “Clean House”, reduce thier inventory. Houses that are just sitting there empty, are not generating any income for the bank. These houses are called “None conforming assets”. Banks don’t like these types of assets, they cost the banks a lot of money.
Wholesaling Properties: Buy the houses at a reduced price, then sell them as “fixer uppers” or even at a “Reduced Price”. The benifit of selling these types of houses, generating a large profit if you get them at a very very low price. It’s hard to, but can be done, generate a passive income from these properties. YOu can generate a large bundle of cash, up front, with these houses.
Wholesale properties to recieve cash for the larger deals. FSBO’s and Lease/Option deals. These deals can create a large profit center, creating passive income and some $$$ at the back end of the deals.
I’m new to REI, and I will be starting with Wholesaling to give me cash to do the bigger deals.
Hope this suggestinons answer you questions.
See you at the bank… :O)