Wholesaling Canadian Real Estate
Top 10 questions and Answers on wholesaling Canadian real estate:
Canadian real estate investors use different strategies and techniques to make instant profit. Wholesaling Canadian real estate can be very lucrative once you receive proper training and coaching from the experts at Flipping4Profit.ca Acquiring properties at a discount requires expertise and training.
Wholesale Canadian real estate deals are rare commodity in any market. Let us review the top 10 questions investors have about Wholesaling Canadian real estate.
Wholesale properties are properties that are sold to investors at a discount and are often rehabbed to add value. Wholesale properties are sold to investors by real estate wholesalers that do not sell to retail homeowners.
After acquiring an investment home from a Canadian wholesaler and real estate expert, the investor then rehabs the property and aims to resell it on a Multiple Listing Service (MLS) or simply rent it out for positive cash flow.
A distressed property is simply a home that is typically being sold for below its fair market value. Most distressed properties are in need of some type of repair. Distressed properties could simply be sold by a panic seller who is in a distressed situation like a foreclosure or a divorce, and need to sell fast and are willing to accept a discounted offer for fast closing.
When it comes to knowing how and where to get repairs done, it is most important to have at least several quotes from different contractors in writing. Having a good general contractor is great because they can come to the house with you and tell you what needs to be done and give you a general estimate of how much it will cost. This must be done before acquiring wholesale real estate deal.
The discounts are dependent on the property, location, and the current market but can range anywhere from 25% to 50%. Some properties require a good clean up, where others may require a full rehab. Investors must get an appraisal in writing from AACI appraiser. One is for the current market value as well another one after repair value (ARV).
The answer is always YES but all negotiations must be based on hard core facts. Inexperienced investors make it difficult to get a good deal on a property and take away what could have been profitable investments for more experienced investors. It is advisable to get proper training from Flipping4Profit.ca before you start investing in wholesale real estate.
Yes! Banks are the best choice but other options can be hard money lenders. Often banks require contingencies that the property be repaired before they can provide a mortgage, which is not possible for wholesale properties since they usually require rehabbing. Private funds and joint ventures can come really handy too. One must have a great mortgage broker as well.
No matter what others have done, one must follow 50 Steps of Due Diligence. Investors should understand that there are a lot of different issues that can arise from performing due diligence.
The sale price of a home is also hard to predict accurately; the estimated after repair value is directly proportionate to the level and quality of the repairs performed, poor design choices can add months on to marketing time and reduce the value of a home by tens of thousands.
Although all of these uncertainties can seem quite intimidating, it is important to understand that real estate is a high risk/high reward proposition, and the occasional failure can be expected even for the most veteran investor.
The fix and flip strategy is when you buy a property on the wholesale market, perform repairs to it to improve the value and then quickly resell the property on a Multiple Listing Service (MLS) for a profit.
Generally the average fix and flip property takes about 30 days to resell from the time of purchase; however, if there is a project that is going to yield a higher return, it can take anywhere from 45 to 120 days to complete the process and still be considered a good potential investment.
As any good investor knows it’s important to allow time for delays in repairing and reselling a property that could make the process go on a little longer.
There are few simple steps to evaluating a property. Make sure you know what investment strategy you are going to use before you start.
Step 1: Determine the current and future value by an appraiser.
Step 2: Determine the rehab cost in writing from 3 different contractors
Step 3: Determine the ARV based on an AACI appraisal in writing
Step 4: Determine if this property will meet your investing goals
Step 5: Determine the expected days on market based on comps and market conditions.
Step 6: Evaluate the potential risk. Are there any unusual circumstances that may prevent you from selling this house for what you have estimated its worth, or renting it quickly and at the appropriate price?
Once you have all this information you can make an informed decision on whether or not to purchase the property.
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