What do I love most about real estate investing?
There’s no one size fits all way to do it.
Regardless of the real estate investing strategy you choose — landlording, fixing and flipping, wholesaling — you can discover sub niches that are perfect for your personality and real estate business.
This include’s co-wholesaling.
That’s right: wholesaling, but with a twist!
If you didn’t already know, wholesaling is a strategy that many real estate investors use to boost their income. In wholesaling, you find deals on distressed properties and goes under contract to make a purchase.
Then, you shop the contract around to prospective investors and house flippers, charging a finder’s fee for the property.
Many real estate professionals love wholesaling because they can make money without having to flip properties themselves.
However, wholesaling on your own can still require a lot of work and time, especially if you’re a beginner looking to get started.
This is where co-wholesaling comes in.
By co-wholesaling, two real estate investors work together to make the process more efficient and close more deals.
Here’s a look at the co-wholesale process and how to get started.
What is Co-Wholesaling?
Co-wholesaling is the process of working with another real estate investor to wholesale a property.
Typically, one investor searches for deals on distressed properties and works with the seller, while the other investor searches for buyers and handles the contract transfer.
The investors split the profits from the wholesaling deal equally.
Advantages of Co-Wholesaling
The biggest advantage of co-wholesaling is that you don’t have to handle every aspect of the deal on your own.
Splitting responsibilities means less work for both parties, allowing you to close deals more quickly. Plus, if you’re brand new to real estate investing, you can get a hands on look at the wholesaling process by co-wholesaling with an experienced real estate investor.
Pretty valuable, in my opinion!
By working with another investor, you also get access to their network of contacts.
Talk about a win-win!
Disadvantages of Co-Wholesaling
The biggest disadvantage of co-wholesaling is that you won’t make as much money on each deal.
Since investors split the proceeds from each deal, your overall profit level will be lower.
However, co-wholesaling often allows investors to close deals faster, which can offset the drop in proceeds.
How is Co-Wholesaling Different from Wholesaling?
Co-wholesaling is different from wholesaling in that you’re working with another real estate investor.
In a traditional wholesaling deal, one investor handles the entire deal on their own from start to finish, and they keep all profits from the deal.
Alternatively, co-wholesaling is a partnership.
Two investors work together on the deal and split both responsibilities and profits.
How is Co-Wholesaling Different from Virtual Wholesaling?
Virtual wholesaling is the process of wholesaling a property remotely using online tools.
In virtual wholesaling, an investor doesn’t see the property in person, and they may not even live in the same city, state, or country.
Instead, the entire deal is conducted online and over the phone.
In co-wholesaling, two investors work together to close a wholesaling deal, finding properties, working with sellers, and finding a buyer.
Co-wholesaling can also be virtual if the investors collaborate online using digital tools.
However, it’s more common for co-wholesaling partnerships to happen in person.
How to Co-Wholesale in 6 Steps
Have I convinced you co-wholesaling is the way to go? If so, here’s a look at the co-wholesale process in six steps.
1. Find a co-wholesaling partner.
The first step is to find another investor to work with.
When selecting a partner, it’s very important to vet them thoroughly to make sure you’re a good fit.
Assess your potential partner’s experience and network to see what they can bring to the table.
In some cases, you may also want to conduct a background check on a potential partner.
Finally, spend time with them to make sure you work together well and have compatible personalities.
2. Sign a co-wholesale agreement.
Once you’ve found an investing partner, draw up a co-wholesaling agreement before you start working together.
This agreement should specify which responsibilities each party should handle, as well as how you’ll split the profits.
You should always get an agreement in writing before starting, regardless of whether it’s a one-time deal or ongoing partnership.
3. Find a property.
Once the agreement is in place, it’s time to find a property to sell.
Most co-wholesalers focus on distressed properties that are attractive to house flippers.
You’ll likely need to negotiate with the current owner regarding the sale.
4. Find potential buyers.
You’ll also need to find potential buyers for your property. Tap into both investors’ networks to find interested investors.
5. Enter a contract.
Work with the seller to go under contract for the property.
Then, transfer ownership to the seller and close the deal — finder’s fee included.
6. Split the profits.
Once the deal has been finalized, split the profits between both of you according to your agreement.
Many investors opt to put the profits back into other real estate investing ventures.
If the process went well, you can repeat it for other properties in the future … rinse and repeat!
Is Finding Buyers & Sellers Different in Co-Wholesaling Compared to Wholesaling?
Many investors find that the process of finding buyers and sellers is much easier in a co-wholesale agreement than doing it on your own.
When you work with another investor, you get access to twice as many contacts, and you have twice as much expertise.
By leveraging both of your connections, you can find buyers and sellers much faster.
The Bottom Line: Co-Wholesale
If you’ve always wanted to get into wholesaling, but haven’t wanted to venture out on your own, co-wholesaling could be a good opportunity.
With co-wholesaling, you split the responsibilities of the wholesaling process, which can help you close deals more quickly and with less effort.
If you’re new to the real estate investing game, and the concept of wholesaling … as long as you do it the right way as we discussed in this article … it can be tremendously valuable, and I couldn’t recommend it enough!
Interested in learning more about wholesaling? Check out this wholesaling course today!
