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2020 was the year of change, however, luckily real estate was one of the few industries that survived the COVID year. And this shows how promising the real estate industry is for any newcomer.

If you’re one of those who are willing to join the real estate industry, let me tell you a secret, you should try real estate wholesaling. Now if you have got the question why there are two reasons why-

  • It can be started with minimum to no investment.
  • It offers huge profits.

But wait, it might not require any investment at first but it definitely requires some prior knowledge. Especially the knowledge about what challenges you may need to face while starting real estate wholesaling.

And in this article, we’ll be discussing the same.

5 Biggest Real Estate Wholesaling Challenges

Challenge #01: Identifying the Right Area

Yes, before you start wholesaling real estate, you need to identify which area would suit you the best. Market saturation can be troublesome for wholesaling businesses and trying to get leads can be quite frustrating. With the evolution of virtual real estate investing, many investors have found new and better markets. After all, dealing in the right location is the winning factor here. Usually, cities with a population of 200K to 1 million offer better opportunities than tier 1 cities.

Challenge #02: Low-Quality Leads

If you’ve set a budget for marketing and advertising to secure leads, then waiting for high-quality leads is the right choice.

However, going through multiple low-quality leads to get those high-quality leads is still a common problem for wholesalers. As it will cost a lot of time, money, and energy.

So the primary goal here is to get more high-quality leads than low-quality leads.

But how to do that?

Here are a few tips-

  • Search Engine Optimization: Search engines can be a great bridge between you and your target audience. And this helps SEO. You can create your own website and also leverage other digital marketing strategies like social media marketing, and pay-per-click ads.
  • Cold Calling: Cold calling is one of the most effective strategies in the real estate wholesaling business. All you need is a few calling agents and a tool that can provide you with a list of prospects. Or else, you can do it yourself manually.
  • Driving For Dollars: Driving for dollars means targeting a specific location and searching for likely leads.

Challenge #03: Inconsistent Lead Generation

This is a very common challenge for almost all wholesalers and investors– to get a constant flow of leads. After all, no business can survive with a great present month and a terrible next month. You need to maintain consistency in terms of profits.

So to create a constant flow of leads, you need to be consistent with your marketing efforts.

Challenge #04: The Rules and Regulations

Each state has its own set of rules and regulations related to real estate wholesaling. And to start a wholesaling business, you need to be well-versed in those rules and regulations. If you knowingly or even unknowingly break any of these rules, you might have to face consequences. So be well prepared before you plunge in.

Challenge #05: Understanding Wholesaling

This one is important if you want to become a wholesaler. As a wholesaler, you’re selling the contract and not the property. It’s crucial to know that when you put a property under contract, you become an “owner per contract” and you’re selling the contract and not the property as you’re not the owner. Once you understand this, you will be able to clear out a lot of confusion.

So these were the top 5 challenges that you might need to face when you start wholesaling real estate.

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Charu Mitra Dubey

Charu Mitra Dubey is a Content Writer at Batch Services. She has been writing for more than three years and has been published on multiple websites like Entrepreneur and Hackernoon. She specializes in writing content for SaaS and B2B companies. You can connect with her on LinkedIn.

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