AstroFlipping might look similar to wholesaling but it is not. Astro Flipping is a concept of selling multiple properties to one investor. While; wholesaling is the process of buying and selling properties quickly below the market rates to an investor or a buyer. So basically the main difference is, in Astroflipping you will be involved with other wholesalers and take a portion of the commission from the sales but in wholesaling, you will get the full commission from the sale.
- A real estate business involves buying, selling, managing, operating, or investing in land and buildings
- AstroFlipping promotes a flipping pitch and the process is like co-wholesaling
- Real estate wholesaling is a type of process that involves acquiring a contract from the seller of the property and assigning that same contract to an end buyer
- The real estate wholesaling business doesn’t require much investment, therefore it is a very popular business model among the real estate enthusiast
- One of the key advantages of real estate wholesaling is, you can make lots of money in less time
AstroFlipping Vs Wholesaling
AstroFlipping promotes a flipping pitch. According to this concept, you focus on purchasers/investors for their properties for all wholesales in the city and then apply a slight discount on any switch. It is like co-wholesaling. In wholesaling usually, you rapidly buy and sell properties and receive the commission. In AstroFlipping you will be connected with lots of wholesalers and you will get a commission from sales like you are eating at “everyone’s table.” On the other hand, in wholesaling your profit is limited to the properties that you have bought and sold.
What Is Real Estate Wholesaling?
Real estate wholesaling is a type of business strategy that involves acquiring a contract from the seller of the property and assigns that same contract to an end buyer. This is a type of short-term investment strategy and it’s a great way to break into the real estate investing industry. Real estate wholesaling doesn’t require significant capital to get started therefore many people are interested to get into this business. It’s a great way for beginners to learn quickly about the real estate market and gain invaluable negotiation skills.
A wholesaler real estate agent identifies properties that are being sold under the market value and then makes an argument with the seller of the property and then assigning the purchase contract to another buyer. This way the real estate wholesaler earns revenue through a wholesaling fee attached to the contract. So basically, a real estate wholesaler acts as the middleman and helps the real estate investors find and close potential deals.
Advantages Of Real Estate Wholesaling
There are quite a few advantages associated with real estate wholesaling. They are –
1. Make Money in Less Time
2. Learn About the Real Estate Market
3. No Credit Involved and Little Cash Required
Make Money In Less Time
Real estate wholesaling is a very lucrative business and it is a great way to make money in less time. If you are a new investor then wholesaling is an excellent option for you because it requires little to no personal finances or experience. If you get a great offer then it is totally possible you can close the deal and get your payment checks in 30 to 45 days. For example, if you find a property worth $125,000 and able to make a deal of $100,000 and put the property under contract. Then you find a buyer and close the deal at $115,000 using your attorney or title company then it means you have made $15,000 in a relatively short time frame.
Learn About The Real Estate Market
Real estate wholesaling is a great experience for people who are new in this industry and has little or less knowledge and experience. Real estate wholesaling will help them fully immerses themselves into the real estate industry in a short period of time. It will help them learn the basics of marketing, negotiating, organizing, and acquiring the proper legal documentation. Moreover, a wholesale deal combines many aspects of other types of real estate transactions that you will be able to learn. After doing one or two deals you will learn what to look for in deals, as well as what types of deals you should avoid.
No Credit Involved And Little Cash Required
One of the best advantages of real estate wholesaling is you only require a small investment to start a career. Moreover, real estate wholesaling doesn’t involve a credit score so it doesn’t matter if you have a bad credit score or not. Even, if you have a bad credit report you can participate in a wholesale agreement because you are not purchasing the property. Here, you are only assigning the purchase contract to an end buyer who is the actual buyer.
Disadvantages Of Real Estate Wholesaling
Real estate wholesaling is also not without potential downsides. Some of the disadvantages of real estate wholesaling are –
1. Income can be unpredictable
2. Dependent on finding buyers
3. Buyers list can be difficult to maintain
Income Can Be Unpredictable
One of the major disadvantages of real estate wholesaling is the income is unpredictable. Real estate wholesaling is not a typical nine-to-five job with a fixed salary. It’s an independent occupation where you are the boss of your own but unfortunately, you are not guaranteed that you will earn an even amount every month. Moreover, you won’t get any health insurance or retirement benefits while you are working as a real estate wholesaler. So if you want to make your career as a real estate agent then you must have a clear idea about how to manage the finances.
Dependent On Finding Buyers
Real estate wholesaling is completely dependent on finding buyers. So if you want to become successful in real estate wholesaling then you must have a solid buyers list. If you have no buyers then you won’t get any deals. And, no deal means no commission. Therefore, the best practice is to have potential buyers lined up before even making an offer to the seller. This way, you will be able to minimize the risk of losing money.
Buyers List Can Be Difficult To Maintain
As a real estate wholesaler, you have to maintain an active buyers list. If you can maintain a successful buyers list then you have won half of the battle of becoming a successful real estate wholesaler. Moreover, maintaining the list is not the only thing, you also have to understand the different preferences of each buyer. If you offer a property that doesn’t fulfill the requirement of a buyer then you won’t be able to close a deal with your potential buyer. Moreover, the buyer might not be interested to hear other proposals from you in the near future. So you should maintain a buyer list and reach the buyer who might be interested in a particular type of property that you have to offer.
What Is Astroflipping In Real Estate Business?
Astroflipping is a buzzword in the current real estate industry. People are more eager to know what AstroFlipping is and how it works. Basically, AstroFlipping is to work with both the seller and buyer of a property and receive a small commission from each property flip. So you are not working with only one property but working with many properties and many buyers and sellers. One of the best advantages of Astroflipping in the real estate business is you can collect a small commission from everyone’s deal including the buyer and the seller.
Advantages Of Astroflipping In Real Estate Business
If you compare AstroFlipping with other investing strategies then you will understand the advantages of this business strategy. One of the key advantages is AstroFlipping is a passive form of investment. Though you have to work hard to find undervalued properties, motivated sellers, and potential buyers but you can do it using a computer and without investing money. So, there’s a little investment to make and you can collect a small amount of commission from both the sellers and buyers. Another advantage of AstroFlipping is it requires less time compared to wholesaling because you don’t have to drive around the city to look for a property that can be bought for below-market value, no knocking on doors, no cold calling, etc.
Disadvantages Of Astroflipping In Real Estate Business
One of the major downsides of Astroflipping is the competition. Because it requires less investment, less time, and has less risk many people are devoting themselves to Astroflipping. Moreover many big companies are also doing Astroflipping so it is quite difficult to compete against a big company. Moreover, these companies have an existing stable list of sellers and buyers so it is very difficult to compete as an individual. Another disadvantage is the profit margin. In Astroflipping you won’t make as much money as you would make in other forms of real estate investing.
So, both Astroflipping and wholesaling have their differences and similarities. Both use the property as the main means to invest and generate profit. On the other hand, wholesaling requires less time compared to Astroflipping. However, if you compare everything then wholesaling in the real estate business is a much safer option.
Last Updated on October 29, 2022 by Magalie D.
Magalie D. is a Diploma holder in Public Administration & Management from McGill University of Canada. She shares management tips here in MGTBlog when she has nothing to do and gets some free time after working in a multinational company at Toronto.