You don’t have to put any money down, hire an attorney, conduct a closing or anything else that is involved with traditional real estate. You collect a check for setting the deal up.
Many novice wholesale investors think you need lots of money or excellent credit to succeed. Or, they think there are complicated classes or licensing.
You’re the broker, and it’s a win-win for everyone involved. Desperate sellers have a buyer for their home and investors save time, money and hassle finding deals on their own. You’re literally handing investors deals.
Another important factor is that you should be able to keep your finger on every aspect of your investment. Keep a good idea about the proportions and layout of your investment. Maintain a good balance in your portfolio. be wary of the so called “Paper Investments”. Do not become overly dependent on them as a downfall in the market could easily lead to major troubles for your investment. Keep a careful eye on such investments and do not let them dominate your portfolio.
Leverage. Leverage, with regards to real estate invesment, is the use of borrowed funds in order to purchase realty. This is done with anticipation that the purchased realty will boost the profit.
Take it upon yourself to do all the leg work in finding the deal then present it to your investment partner. This is a great strategy if you either don’t have enough resources or just used them all up in a previous deal. For a reasonable share of the profits, your partner may be interested in financing the down payment and closing costs of a great deal you have found and this could lead to even more in the future.
Just in case you got tempted to withdraw your cash early then you must understand IRA rules for withdrawal. If you want to have a clear understanding on IRA rules for withdrawal then seek out an IRA custodian. The rules that were mentioned above are just the basic rules but there’s a lot more IRA rules that you should know. Are you wondering of what can happen if you break the rules? The answer is simple. You will be paying for penalties therefore you will be losing more cash than earning more.