Wholesale vs. Wholetail: What’s The Difference?
As an active real estate investor, there’s no doubt you’ve heard the term “wholesale” thrown around – but what about “wholetail”? While they may sound similar, there are distinct differences between the strategies.
Wholesale and wholetail are two distinct real estate investment strategies that provide different advantages under different circumstances. Wholesale is a method of sourcing potential investment properties, while wholetail is a hybrid method for selling a property already under contract. The savviest investors consider implementing both strategies into their playbook so they can maximize their returns depending on the circumstances of the deal.
The role of a wholesaler is to identify properties that would make ideal investment opportunities, put the home under contract, and then find an interested investor to buy it. That investor then turns around, and either uses the property as a Fix and Flip or Buy and Rent.
As a real estate investor, partnering with wholesalers can be one way to greatly increase the number of opportunities in your investment sourcing funnel. Understanding the role of wholesalers, how their fees work, and some industry standards can be helpful when considering adding wholesalers to your strategy.
Wholetailing is an investment strategy that is a mix between Wholesale and Retail. An investor purchases a property at a discounted price, as if they were wholesaling the property; but rather than wholesaling it, they complete minimal upgrades themselves and attempt to sell it on the MLS to an owner-occupied buyer (like a retail transaction).
As a real estate investor, these deals can be quite profitable because you’re looking for a property that requires very little work upfront, so you can turn properties with less rehab costs, and potentially turn it even faster.
Many people consider this to be a safer, in-between strategy than either wholesale or a complete fix-and-flip. Continue reading our blog post about wholetailing to learn more about the benefits of this strategy.
There are several other methods investors can use to strategically find and flip lucrative investment deals. Continue reading the Backflip blog for more information and resources on various investing strategies.