How Wholetailing Can Transform Your Profits
Wholetailing Can Transform Your Profits
Are you a house flipper who wants to generate speedier profit from your work? Or you are a wholesaler who wants to increase their profit margins a little from the homes you already broker your deals.
Wholetailing real estate is a happy medium solution for many working in real estate looking to make their trade perform better for them. It involves some principles of wholesaling, in other words, being the conduit between the seller and buyer, as well as some principles of flipping. Doing a complete renovation before selling could be the solution you are looking for.
This article will cover what exactly wholesaling real estate means, how it works, and the benefits of wholetailing.
What is Wholetailing?
To wholetail real estate is to buy a distressed property and then make minor improvements or ‘flip’ to make the place presentable and to make a profit.
Wholetail vs. Wholesale
The traditional wholesaler will not usually own the property, instead securing a contract with a seller who will sell at a discounted price, then finding a buyer who is willing to pay more than their purchase price, leaving the wholesaler to pocket the difference, which can lead to lower profits than traditional real estate.
With wholetailing, the wholesaler will own the property and do a little work to get it up to a good standard before selling it for a better profit than they would from simple wholesaling.
Wholetail Real Estate vs. Flipping
The traditional house flipper, on the other hand, is someone who buys a property to do some significant renovations and restorations before selling it for a juicy profit which can lead to substantial earnings. Still, the work involved is extensive, tiring, and can be a bit of a gamble.
When a flipper switches to wholetailing, they will do less work to the property, simply making good and ensuring it is cosmetically sound before selling it to another party which is easier than renovating and a quicker way of making money.
How Does Wholetailing Work?
Wholetailing is a middle ground between being a flipper, with all the tiring and expensive work to do to the property before selling it, and a wholesaler, who needs to have quick thinking and confidence to sell a distressed property for a higher price than they acquired it for, not always an easy feat.
While this method takes away the pains of wholesaling and flipping, it also combines the benefits of those two worlds—generating higher profits from selling a presentable home to the end user and the speed of a wholesale deal. Let’s look at the benefits in more detail.
Benefits of Wholetailing
- Flexibility: Since the wholetailer owns the property for a short time, they have complete flexibility and control over how much work they do to a property and can aim to market the house to a lucrative retail buyer.
- Quicker than flipping: Because the wholetailer is doing a standard fix to the house, there is less physical work involved than fully flipping a property. This makes it quicker, easier, and less costly, which in turn, adds to the profit margin.
- Large buying market: When a wholetailer has completed their cosmetic and other work on the property, they have a home they can sell to a consumer rather than just another investor looking for a bargain. The house can be sold at a competitive price, and the market is wider and more varied than with simple wholesaling.
- More lucrative than wholesaling: Wholesaling is a quick way of making money, but it can often result in lower profits than flipping because the distressed house is in the same state when it is sold as when it was purchased. Wholetailing allows for a greater margin because the basic improvement work has been done, leaving a blank canvas for the new owner.
Wholetailing can be described as a ‘happy medium’ solution for real estate agents, flippers, and wholesalers alike. It involves some of the principles of wholesaling, where the dealer acts as the middle person between a seller and buyer but doesn’t physically own or improve the property for a quicker deal, and some principles of flipping, where there is extensive work done on the property for a bigger profit.
When we ask, ‘what is wholetail real estate?’ the answer is that it is a way to turn a distressed home into a property that can be marketed competitively to the end user with minimal work and maximized profit.