Wholesaling Homes As A Passive Income Investment
Is wholesaling homes actually the best real estate investing strategy for passive income and retiring early?
Wholesaling homes has often been dismissed by some groups of real estate investors as not being passive and requiring “too much hard work”, but is this accurate?
Certainly there are plenty of buy and hold real estate investment ‘gurus’ that make a ton of money on selling real estate courses on acquiring rentals and would certainly miss out on a lot of income if people thought wholesaling homes was a better option or fit for their goals. Then, even among some investor veterans there are many that lack knowledge about real estate wholesaling and make broad uneducated comments like this. So what’s the real deal?
How does wholesaling homes stack up against purchasing significant numbers of rental properties when it comes to generating passive income and achieving your personal financial goals?
First, it is important to lay out that there are many forms of real estate investment that do work and many different combinations of strategy and tactics that can be applied. So there is no single way that is the only way to benefit from today’s housing market. However, it is only common sense to seek out the best method for you to personally put the most money in your pocket, see the highest return on your capital and time and reach your objectives fastest.
However, when looking at rentals, it is almost laughable that a buy and hold investor could suggest that the ongoing burden of dealing with tenants 24/7, 365 days a year as well as constant building maintenance is easier than flipping houses.
That burden can be eased by outsourcing property management, but those that become DIY landlords aren’t just taking on another day job, they are putting themselves in a position that requires nights, weekends and holidays.
In contrast wholesaling is far easier. Even choosing to be a hands on solo wholesaler allows the freedom to choose how much you want to do each week, or not and scaling as you like.
Perhaps the real beauty of this strategy is not being obligated to ongoing maintenance for fear of lawsuits. However, it also means a lot more cash now which could result potentially making far more in the short term and the ability to retire far sooner than from miserly rents when you look at real net cash flow.
Besides, what small minded buy and hold investors don’t get (besides the frailty and high risks of their own strategies) is that wholesaling homes can easily be a passive income business.
It just requires setting it up right, investing in a system and automating it with the right technology, software and an employee or too. Then there is even the potential for franchising.
Plus wholesalers enjoy far more control and higher percentages of the proceeds than being an agent, owning a brokerage, investing in REITs or other real estate stocks or building a heavy portfolio of rental properties.
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