Weekend Millionaires Book

I am looking to get a definition on “Buying Wholesale” from someone who uses the book “The Weekend Millionaire’s Secrets to Investing in Real Estate”

The author talks about buying Wholesale using the NOI formula where, as the example goes, a person is selling a house for $90,000 (which I take is the Market Value). Now his NOI shows that to rent it out he would ned a Mortgage (or combined financing) equal to $680 per month or $8,180 to make it work.

Conventional loans show a payment of $680 per month at 7% interest is roughly $75,000 but with creative financing you can actually give the seller what they are looking for ($90,000) while keeping your cost down to $680… win-win situation.

Now my question is “Is this really wholesaling?” I know if it is a Win-win situation then the rest is samantics (sorry for spelling) but I would like to know when people are talking about wholesaling what is the best definition of it.

Thank you.

In general;

Flipping = Buy and Sell within a short period of time.

Wholesaling = Buy Low and Sell Low.

Wholesale/Retail = Buy Low and Sell High

Most people think of [i]Price[/i] when they think of [i]Buy Low[/i].

You can also get below market [i]terms [/i] with a higher price, and still have a wholesale deal 
- as long as you are getting [i]wholesale monthly payments.[/i]

From the book description on Amazon:

"The Weekend Millionaire shows readers how to look beyond price to the fundamentals of what makes a property valuable and to leverage that value in order to build wealth, consistently, over years."

I have the Weekend Millionaire Tapes and I thought they were great! When he is talking about buying “wholesale”, he is talking about buying at a discount. However, he carries it one step farther and consider buying with a discounted interest rate to also be a wholesale deal. The only problem with this theory is that buying at full price with a discounted interest rate only yields a “wholesale” deal if you keep the property until the mortgage is paid off or are able to find someone else to buy it from you under the same terms. In other words, it limits your ability to sell the property since you’ve paid full price. I think that the strategy has merit if you are a seasoned investor (with many other properties) committed to keeping the property long term. However, I think it is dangerous for new investors and I would suggest that buying at a discounted price is a lot safer than buying at full price but at a discounted interest rate.

When you hear about someone “Wholesaling” on this board, they are talking about buying a property at a discount from a motivated owner and then quickly reselling the property to another investor for a relatively small profit.


Howdy Propertymanager:

Could be a large profit too if you make a super deal on the buying end.