Wholesaling Properties: Funding Deals without Money or Credit

Some skeptics, even those who have invested in real estate in other ways for years think it is too good to be true. However, the savviest investors, and especially those who have far more than enough cash of their own to buy all the property they want still seek out creative ways to buy and sell property so that they don’t have to put their own money on the line.

So how does wholesaling properties without coughing up your own cash or having the credit to walk into a bank work?

Seller financing is one option for wholesaling, especially in a down market. This is where the current owner will offer to hold a mortgage or take installment payments. This avoids having to go into a bank for conventional mortgage financing, though many will often demand some ‘skin in the game’ in the form of down payment.

To get around this a second tactic is to simply flip the contract without actually buying the property. This saves on closing costs and leaves more room in the deal for everyone.

If that’s a little too creative for you and you definitely want to buy and sell despite the higher costs and increased paperwork and transaction management then consider transactional funding. These lenders offer up to 100% financing, plus closing costs.

Some confuse this with hard money loans. Hard money lenders are similar but do often require more qualification and loan based on the value and the interest and points can be high.

If your deals don’t fit the mold for any of the above options there are also private mortgage lenders and crowdfunding websites to entertain as options for more creative and flexible funding sources. Just don’t let this mission become a major distraction and take away from you actually wholesaling properties and bringing in money.

Finally, there is always the option of bringing someone else in as a partner. This can be structured any way you like. Just make sure you are selective about who you decide to partner with, analyze the true pros and cons and evaluate the worst case scenario. Most importantly, never ever enter into a partnership with anyone unless you have a formal written agreement, even if it is with your twin sibling.

As you can see there are actually endless solutions and ways of wholesaling properties without using your own money or having to use your own credit. So start believing, start using it and make lots of money this year.

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