In my last few emails, I’ve shared some controversial thoughts about wholesaling. That’s fine. Provoking honest thought is a good thing. I want to conclude this series by asking you this question: Are wholesalers real estate investors?
Here’s what I believe investing really is. Investing is when you use intellectual, economic and/or physical capital in the form of ideas, money and tools to generate cash flow and wealth. Individuals who get up every day and go through a consistent routine (whether they call it a hustle, a grind or a job) whereby they expend time and effort in exchange for economic remuneration are called employees or business owners. They are not necessarily investors. An investor is someone who puts their capital to work, maybe with the capital of other individuals, and allows the capital to perform, generate revenue and build wealth.
Based upon this, the typical wholesaler is not a real estate investor. I refer to them as real estate entrepreneurs. They have a job. They own a business and may have employees, but it is still a job and is taxed as such. If the IRS taxes you as if it was earned income, then you really are not a full-time investor. Some may have developed procedures and systems such that they can consistently generate large sums of money. In reality, however, they are entrepreneurs, not investors. They don’t have capital that is consistently using real estate to generate cash flow and wealth for them.
On all my emails, but especially this one, I welcome your thoughts and feedback.