If I wanted to make money in real estate investing, which of the two would be better for me? Making money from wholesale or making money from rent to own properties? I see people ahve alredy covered how making money from wholesale works, but I am concerned now with rent to own. Which of the two requires more hassle ove the other and more paper work to complete the deal and get paid?
I am beginning to think rent to own may be something I need to take advantage of for myself as for getting my own place to stay. Right now I don’t work a full-time job making less than enough to survive on week to week. Then I am swamped with other debts too. Would rent to own not be a good idea considering my situation? How can I make money off the rent to own if I was to get one?
wholesaling will teach you how to get rent to owns at the right numbers. i would suggest wholesaling if you are new. rent-to-own is too easy to trick yourself into numbers that dont work in the real world. do you have a plan for a rto tenant / buyers missing a month payment?
I don’t have a plan for rent to own tenant, which is why I was asking how do I go about making money from rent to own. I mean rent to own is something I am new and inexeperienced in. I was suggesting I use rent to own for my sake as a way of having a place for me to live if I ever decided to get a place for myself. The bad news is I don’t have a full-time job making enough money.
i dont really follow what you are asking. rent to own, when broken down, is just leasing to a tenant with an option fee to buy the property with a certain amount of rent credits applied towards the sales price.
I don’t know a lot about rent to own, but the little I am aware of is the option to buy you are talking about. I know this may be confusing but, I got the idea from somewhere on one these forums that there is money that can be made from the rent to own. Someone was saying something like get the rent to own property and find a tenant to put in there as soon as possible, which somehow I make profit from the rto property. I wish I could find that post but, I got this idea from some other poster and wanted to know if it is really possible to make money with rent to own.
im guessing they are talking about keeping the option fee. yes, you can make money doing this but you can tangled in a lot more mess than just wholesaling a deal.
No entaglement at all, if you know what you’re doing. You assign the deal and you’re out of the loop. It’s called a Cooperative Assignment. Much easier than wholesaling. Do you think a homeowner will prefer to take .35 on the dollar for their house, (wholesaling), or full retail (Cooperative Assignment)?
Easy is a relative term. Compared to laying down hot tar in Florida in July, yeah, it’s easy. Compared to asking a homeowner to give you their home at a wholesale price, yeah, it’s definitely easier.
But like any business, real estate requires effort. Most importantly, it requires that you get out and take action. Studying and analyzing and trying to know everything is simply an excuse for not taking action. Do just one deal and you’ll be surprised at just how much you know.
You can also wholesale Rent to own property. The nice thing about wholesaling is you can pretty much wholesale ANYTHING as long as it’s at a wholesale price ;). If your just starting out I would say do a few simple, clean wholesale deals before you start doing anything more complicated.
If your financial situation is unstable, I would suggest wholesaling in order to build some cash reserve. Rent to own puts you in a liability and responsibility position and it is riskier in your situation.
You probably will never get rich with wholesaling, but with the proper self discipline, you could build a nice cash reserve and then get into other real estate niches, like Buy and Hold or Commercial, to build long term wealth and monthly cash flow.
pet peeve I commonly see people say wholesaling when they’re referring to assigning. Not the same thing. Wholesale means at a wholesale price. When you assign a lease option (a cooperative assignment) it is usually not at a wholesale price as you stated…usually it’s full retail. When you wholesale a house you’re assigning it at a wholesale price, usually for all cash to an investor.
I feel the biggest challenge if I was to start “ASSIGNING” property is establishing a team of key players involved in the “assignment” deal. Just going out meeting some random anybody to be on my team may be easy but doesn’t sound easy for a new invester stepping into the business. I mean I have to learn who to find and what to say to get these folks involved. That’s my concern. If I didn’t have to go through all that then the process would be a lot less trouble in my opinion.
You’re right. This isn’t going to all fall into place for you. Whatever you decide to do in REI, there will be some work involved. If you think otherwise, the late night infomercials have had too much of an effect on you.
Now to be constructive…you can read on here and ask people what kinds of traits you should be looking for in people you’ll be using. People at your county courthouse will be familiar with the local attorneys who do the most RE closings. There are also tons of questions on here from people about how to build a buyers list. Some of your adventure will be trial and error. I didn’t magically stick with the first repairman I found in the phone book. I got referrals and went thru a few people before I found who worked for me. Now that I have all that figured out, there’s much less uncertainty in my business.
What kind of “team” do you feel that you need before doing assignments of any kind? Aside from a REI-friendly closing agent I can’t think of anyone else you need as far as a team is concerned.
Some of what I know are contractors, title companies, closing attorneys, real estate agents, etc. Those are the kinds of connections I am talking about. I have no clue how to pick these people at random, nor do I know what to say to get them on my team.