Derek wrote in, and had a great question:
Derek writes: Being a complete newbie to real estate investing I started with listening to podcast, reading blogs and forums and looking to network with others. My question is, would wholesaling being a good avenue to build capital so that I can venture into flipping and/or buy and hold opportunities?
Speaker 1: Welcome to the real investing show with Tim heritage each day, we’ll provide real investing for everyday investors. Tim is a nationally recognized real estate investing expert podcast, host and public speaker. He built his businesses from the ground up and is here to help you do the same. Here is your host Tim heritage.
Speaker 2: Welcome back to real investing. I’m Tim heritage today, Derek Wrights being a complete newbie, the real estate investing. I started with listening to podcasts, reading blogs and forums, and looking to [00:00:30] network with others. My question is, would wholesaling be a good avenue, the build capital so that I venture into flipping and or buy and hold opportunity? Well, Derek, that’s a great question. And it’s probably the first question that most people listening to this podcast have because in general, most Americans don’t have excess capital that they can just sink 20, 30, $40,000 into a house and wait for it. So wholes sellings, that thing that many people turn to is a way to build up capital. [00:01:00] And as a way to, uh, scale their real estate investing business, I’m a big fan of wholesaling. I still wholesale. Uh, as we sit here this week, we will probably close on one wholesale this week and sell two or three more, uh, at least two more, uh, to investors that will close in the next couple weeks.
Speaker 2: So it’s still a very active part of my business, but I will tell you Derek, the part of my business, that it is, is to dispose of the inventory that I am able to generate through my advertising in a profitable manner. [00:01:30] In essence, I don’t have an interest in a mobile home in Quinland Texas on an acre, but when the people call me and they say, they’ll take $30,000 for it. And I look and see it’s worth a hundred, I’m not just going to say no that doesn’t fit my business strategy, call someone else. So we go out and give ’em the 30,000 they’re asking and then turn around and sell it to someone for 60 or $70,000, and then take that money and then put it into play in our desired exit strategy, which would be [00:02:00] at the moment, a lot of Airbnb or corporate housing type properties.
Speaker 2: So yes, wholesaling is a good avenue to build capital. That’s your question. I will tell you though, there’s a lot of people that get stuck in wholesaling. They never really make it out of wholesaling. So if you are going to be in wholesaling, never lose sight of the reason you’re doing it because the money can be addictive and it’s really easy to get 30 or $40,000 and then level up your living expenses, et cetera. Now, I’m not saying that you shouldn’t [00:02:30] celebrate your wins and enjoy those, you know, spoils of war, but Derek, you have to be really careful in wholesaling because the power of, I think ed Myla just wrote a book, the power of one more. If I were had just kept one more property, just one more property per year for the 10 year 20 years, I’ve been doing this, it’s a difference in net worth of 10 million.
Speaker 2: So just hear that, right? It start with wholesale, build up your cash, live as low on [00:03:00] the hog or low on the totem pole as conservative of a lifestyle. As you can build that cash up and get into the buy and hold game. And I, I’m a fan of having a day job and then treating real estate as an investment. It’s makes it a lot easier, a lot more enjoyable, but yes, if you’re wanting to go full time and you’ve got the bug, I highly encourage to, you know, grab a hold of that feeling and, and be an entrepreneur, but just know you’ve gotta watch out and stay focused on what your [00:03:30] dream is. And like my website says, the business is the vehicle, not the dream, right? And so don’t get caught in the transactional lifestyle, really focus on the wealth mindset and wholesaling can be a great way to get you there. So Derek, thank you for the question. I hope this helps. Remember if you’re listening to this episode, hop on over to, I have lunch, money.com. Submit a question. We’ll see you tomorrow.
Speaker 1: Thank you for hanging out with us today on real investing. If you have questions, comments, or feedback, please visit Ihab lunch, [00:04:00] money.com. Tim. Can’t wait to hear from you. We are always grateful for your reviews. And if you enjoyed this episode, please subscribe and share it with your friends. Remember the business is the vehicle, not the dream. See you. Next time. The proceeding program is provided for general education purposes only and does not constitute legal tax, financial investment or other professional advice. No information contained in this program should be construed as financial investment or legal advice from any individual author of post or guest. You should always consult a financial advisor before investing.