I’ve heard quite a bit of talk about making a nice return from property by buying at wholesale and selling at retail price.
Does a property really have a wholesale price? As I would have thought that the price of a property is the price of the property (excluding terms). Is this not the case?
Or is this just another way of explaining the process of finding properties with problems and solving them?
Cheers,
Scott.It is a bit of both, really.
Say you find a property you reckon is worth $100k. You look at the recent sales in the area and all the other houses around that are like the one you’ve found sold for between 95k and 105k. But you negotiate and find that the vendor would love to take, say $85k if you can write him a cheque today, no conditions.
You’ve just found a house at a “wholesale” price. Or, you could also say you found a vendor with a problem and you can provide a solution (assuming you CAN write them that cheque).
So, it could be looked at either way, really. The main thing to remember is that negotiation is aiming for a solution where both [or all] parties win.
Cheers,
Craig.
100% of the shots I don’t make don’t go in – Wayne Gretzky
It is interesting because the first reference I ever heard about buying “wholesale” (and I have been in property for over 30 years) is when we I used it in marketing our property development services http://www.metropoleprojects.com.au in 2001.
Since then it’s has been bandied around and a little basterdised.
In general retail purchases, if you miss the retailer and go straight to the manufacturer or distributor (lot’s is manufactured overseas now) one used the term wholesale – this meant buying without the retailers margin.
And that’s what our property dvelopers program allows – investors to become an “armchair developer” and get their investments at wholesale by making the final developers or retailers margin.
Now sorry if this post smacks of advertising – its not mean to – over the years I don’t think I ever got a development client (as opposed to a buyers agency client) from this forum.
I’m only mentioning this becuase I know where the term wholesale began if you take it in the context we are speaking of. I remember the early days of the somersoft fforum well, when I first introduced it – long before this forum was alive.
To me buying an established house well, because of good negotiation is not really wholesale. It is buying below market price .
Michael Yardney
METROPOLE PROPERTIES
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