Wholesale real estate is impacting urban development

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How Wholesale Real Estate is Impacting Urban Development

9 January 2024

In an overarching sense, wholesale real estate is essentially a way to buy and sell real estate contracts as opposed to the properties themselves. A real estate wholesaler acts as a type of “middleman” between a buyer and a seller. Typically, the properties in question are vacant or otherwise in extreme disrepair.

Wholesale real estate is impacting urban development

The wholesaler would get the seller to agree to one price and the buyer to agree to a higher one. The difference would be what they take home as a return on their investment. Ultimately, the process creates a mutually beneficial situation for everyone involved.

But what a lot of people don’t realize is that wholesale real estate has an impact on other areas, too – particularly when it comes to the development of urban landscapes. Indeed, these two concepts intersect in a variety of fascinating ways, all of which are more than worth a closer look.

1.  Increasing the Pool of Investors

One of the biggest benefits of wholesale real estate that is especially relevant in this context has to do with its low cost of entry (relatively speaking). It can cost a lot of money to purchase a property yourself, put up the funds necessary to rehabilitate it, and get it back out on the market. Some may not have the capital available to do that or might not have the time or energy to even begin.

With wholesale real estate, however, these are no longer obstacles. This is because you’re not actually buying the property – you’re simply a core part of the transaction. You’re not putting your own money into rehabbing it and “flipping” it – someone else is. You’re just there to get the process started, all while opening up the arena to more investors as you do it.

Many urban areas are ripe for this kind of redevelopment, but the properties themselves may need a great deal of work. If you can act as the proverbial “starter pistol” for a far larger movement, you have the potential to get in on the ground floor of a truly lucrative investment opportunity. You also get to do your part to improve a neighborhood as well.

2.            Revitalizing Neglected Areas

Speaking of neglected areas, wholesale real estate also impacts urban development by creating a ripple effect in the most positive way possible.

There are many areas of the country that have fallen into economic decay over the decades – to the point where they attract virtually no attention today. No major employers are nearby, so people don’t want to live there. Those who do live there suffer from a lack of opportunity above everything else.

If you’re able to begin wholesale real estate investing in a location and make it more attractive to other investors, suddenly, there is a lot of economic activity that wasn’t present before. People are putting money into homes to get them ready to go back on the market, which helps create jobs for locals. New people move into the area, which brings with it even more economic advantages. Over time, the schools can’t help but get better. Major employers suddenly find the area attractive in a way they didn’t in the past. The list goes on and on.

Is all of this going to happen overnight? No, absolutely not. Urban development, by any means, takes a great deal of time. But you have to look at things in terms of the generational impact that you could potentially help create. Just as those areas didn’t become neglected in a year, they won’t be truly revitalized in a year, either. But you have to start somewhere, and wholesale real estate is one of the better opportunities to do it.

3.            Empowering Community Growth

These concepts continue to play out in a larger sense as wholesale real estate ultimately plays a role in the growth and development of the community itself.

More jobs are created as more people live and work in an area. Businesses not only have the space to operate but access to the talent they need as well. This directly contributes to increased tax revenues for the community, which go into things like fixing roads, preserving green space, and more.

It’s also necessary to point out that more people living in an area is always a good thing – particularly when they come from diverse backgrounds. This is how people get exposed to new ideas and learn more about how the world works beyond their own backyard. This can even help have the same impact on surrounding communities, even if the wholesale real estate development activity never reaches them.

Things like wholesale real estate can even positively impact the local environment. Since a lot of the properties in a wholesale real estate transaction are distressed, it’s safe to say that they’re hardly energy-efficient or economically friendly. However, once activity is drawn to them and the rehabilitation process begins, this can and often does change.

Wholesale real estate also often leads to the creation of mixed-use developments where there were none in the past. So you’re not just talking about residential properties. You also get commercial or even industrial properties as well. Retail becomes more readily available. The community becomes more vibrant and more dynamic. This gives people new places to gather and interact with one another. It brings them together in a way that they simply hadn’t had the chance to do prior.

All told wholesale real estate has a direct and long-lasting impact on urban development in ways that a lot of people don’t expect. As these homes are rehabilitated and eventually resold, more people move into the area and help empower the local communities. It helps to increase property values. It assists with local job creation, which can stimulate the local economy. It does all this and more, all at the exact same time.

When you also consider that in addition to driving a legitimate economic resurgence, it is also a way to foster sustainable urbanization, you’re looking at a perfect storm of advantages that you’d be hard-pressed to get through other means.

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