Over the past decade, the United States has seen unprecedented buyer demand, price appreciation, and capital influx from all types of investors in the real estate market- from hedge funds to mom-and-pop house flippers.
Real estate wholesalers, though still an emerging crowd, have long been able to carve out a niche within this vast industry. Value-add investors, including fix and flippers, rental property owners, and real estate developers, are continuously seeking out new real estate properties to acquire in order to stay in business.
This creates massive opportunities to capitalize as a real estate wholesaler when the right strategies are followed to create significant value for investors - investors who pay wholesale assignment fees to the tune of $10,000, $20,000, and even over six figures!
On the residential side, there are approximately 143,786,655 housing units across the country with about 64.4% being owner-occupied. That means over 51,000,000 of these housing units are investor-owned.
But one must ask, what cities are the best to wholesale real estate? We believe you can successfully wholesale real estate as a beginner or an expert in any market, however, there are some cities where wholesaling real estate is poised to work exceptionally well.
In this Real Estate Skills exclusive article, we'll reveal the best cities to wholesale real estate across the USA. Let's dive right in:
The real estate wholesaling business can be a lucrative venture if you select the right cities to focus on. But with so many cities in the United States, how do you determine which ones offer the best opportunities? We will guide you through the best cities to wholesale real estate based on factors such as population growth, economic stability, and housing market trends.
Whether you are a seasoned investor or a newbie looking to break into the wholesaling market, this list will provide invaluable insights to help steer your decision-making process and maximize your return on investment. Here are the 17 best cities for wholesaling real estate:
Houston is one of the largest cities in Texas (near Galveston Bay). With a globally recognized oil and gas industry and impressive job growth opportunities, there’s no reason to think Space City won’t continue its incredible growth rate. In particular, Houston’s metropolitan area—which includes Harris, Montgomery, and Ford—has demonstrated an increased propensity for growth and very attractive wholesale prospects for investors.
Houston has been included on this list of the best cities to wholesale real estate because of its sustainable growth potential. The current speed at which homes are sold, low median home price, and the above-average availability of distressed properties also lean heavily toward opportunistic wholesalers.
Austin is well known for its educational opportunities, LBJ’s Presidential Library, vibrant music scene, and bustling nightlife. However, Austin’s popularity hit new heights in 2020 when Tesla announced its intentions to build an auto plant that would dramatically impact the local job market. According to TechCrunch, Tesla’s latest annual compliance report acknowledged that the electric vehicle manufacturer plans to invest at least $1.1 billion in the county over the next five years, making Austin even more attractive for wholesalers.
Austin’s popularity has hit new heights over the last two decades and has an impressive affordability index. With many job opportunities and a thriving economy, there are always exciting investment opportunities to find for owner-occupancy or rental investment opportunities.
Dallas is another excellent location to consider wholesaling real estate in 2023. The county seat of Dallas County extends into Colling, Rockwall, Denton, and Kaufman counties, giving investors a wide range of opportunities. Like the rest of the Texas real estate market, wholesalers are enjoying the current market cycle because of the city’s rapid growth and diversity.
In addition to the leading indicators, Dallas ranked third on Indeed’s list of “Best Cities For Job Seekers”; that, combined with excellent affordability, a strong demand, and a median home value within the nation’s approximate average, makes Dallas a great place to wholesale real estate.
The metro Rochester area in New York (which usually includes six surrounding counties) is the third-largest in the Empire State. Rochester’s Economic Development anticipates Rochester, home to Xerox and Kodak, will be a top metropolitan area for overall growth.
Rochester remains an affordable market and is often ranked atop those cities regarding the quality of life. Home values have increased significantly, marching higher for the better part of a decade. Rochester’s neighborhoods offer varying prices, with the most affordable being Dutchtown.
Atlanta is the crown jewel of Georgia (also known as the Peach State); it offers a diverse population, industries, and real estate investments. Atlanta’s airport constantly ranks as one of the world’s busiest airports, suggesting the economy is growing.
Despite Atlanta’s incredible recent growth and continued strong demand, the area remains relatively affordable for wholesalers and other investors. More importantly, Atlanta should remain one of the best cities to wholesale real estate as long as the most fundamental indicators maintain their current trajectory.
Denver’s economy and population have proven resilient, growing at an impressive rate in recent years. In addition to hosting some of the most beautiful outdoor recreational areas of the United States, Colorado also has a flat income tax at the state level, so no matter what you earn, the state income tax never varies. Denver made our list of “The Best Cities To Wholesale In” for one reason: demand.
Like all of its metropolitan counterparts, homes in Denver are selling fast. Inventory drives up prices, so wholesalers must act quickly to remain competitive in Denver. The city appears to have plenty of opportunities, so there’s never a shortcoming of potential deals.
Jacksonville is located near the Georgia border and the Atlantic Coastline. This northern Florida city has seen consistent growth in population and home values recently. The unique combination of appreciation and interest has helped Jacksonville become one of the best cities to wholesale real estate.
The median home value in Jacksonville is well below the national average, which currently serves to increase demand. The added attention appears capable of supplementing local wholesalers with a contract to assign.
Miami is one of the hottest markets in the country, if not the world. While always a winter playground for “snowbirds” looking to escape the frigid temperature of their current living situations, Miami’s residential market receives much attention year-round. Most notable, however, is the international demand for Miami real estate. Buyers worldwide appear to covet real estate in Miami, which bodes well for wholesalers trying to facilitate deals.
Up to this point, the Miami real estate market is the least affordable on the “Best Cities To Wholesale” list. Nonetheless, there is tremendous growth, which is bound to offer some excellent investment opportunities in the future.
Phoenix has always enjoyed a good reputation amongst those who love outdoor living and retirees. As one of the most active markets in all of Arizona, Phoenix has combined historic demand with rapid rates of appreciation; this unique combination offers wholesalers the ability to seek out more deals and potentially earn more per contract assignment.
As one of the best cities to wholesale real estate, Phoenix investors will face a lot of competition. However, those who learn how to wholesale real estate in Arizona will find an advantage, especially when trying to find and analyze deals.
Read Also: Is Wholesaling Real Estate Legal in Arizona?
The number of homes sold above list price in Tampa is dropping year-over-year, and about 34.6% of homes have exercised price drops. As a result, homeowners are looking to sell—and sell fast. With a relatively affordable market, wholesalers who can identify these sellers should find Tampa to be a great place to invest.
Florida remains one of the best states to wholesale properties because of its high demand and relatively affordable home values. On the other hand, Tampa is one of the many reasons Florida remains so attractive to investors.
Indianapolis has attracted a lot of attention from wholesalers and investors outside Indiana because of its affordability. In fact, Forbes acknowledges that Indiana is one of the cheapest states to live in in 2023, and Indianapolis is a big reason why. The city’s affordability creates demand at a time when demand is pent-up. The combination of activity and affordability has made Indianapolis one of the country's best cities to wholesale real estate.
The median home value in Indianapolis is more than $100,000 below the national average, which is probably why demand is preventing homes from lasting on the market for more than seven days. As a result, investors will have plenty of opportunities, but they’ll need to move fast.
Orlando isn’t only one of the best cities to wholesale real estate in Florida; it’s one of the country's best cities to wholesale real estate. Orlando, a city in the center of the Floridian peninsula, has been an investor’s haven since Mickey Mouse took up residence decades ago. Orlando is an exciting mix of high-tech employment and tourism.
“Orlando is currently growing at a rate of 0.5% annually and its population has increased by 1.52% since the most recent census,” according to World Population Review. By any metric, the city is growing fast, which means there will be plenty of real estate deals for wholesalers to help with.
San Antonio is another Texas city that made our “Best Cities To Wholesale” list. Continuing the trend, San Antonio combines historic demand with rapidly increasing home values. In fact, the latest rate f appreciation across the country has made San Antonio more attractive to out-of-state investors.
San Antonio’s real estate market has experienced tremendous growth but is still affordable, with a median home price well below the national average. Wholesalers should be able to locate great opportunities in San Antonio.
Charleston is in South Carolina, among the most charming coastal cities in the southern United States. Charleston is still affordable, although median home prices have risen above national averages recently. Nonetheless, the city’s affordability continues to attract a lot of attention. The demand facilitates much activity, which bodes well for wholesalers.
The Charleston region’s population is expanding faster than the national average, further indicating the area's popularity. Therein lies the benefit for local wholesalers: activity will facilitate more deals.
Memphis, located along the Mississippi River, is Tennessee’s second most populous city. Memphis’s inland port offers a great job market, which would explain the city’s rapid growth in population over the last few decades. That growth is also responsible for the need for more housing. As new buyers enter the market and interest rates settle, the demand will cater to local wholesalers.
Memphis has scored some of the highest appreciation rates but remains quite affordable from a historical perspective. In fact, the median home value in Memphis is less than half the national average, which should promote a lot of activity for wholesalers to capitalize on.
The Colorado Springs real estate market has seen impressive appreciation and population growth. Over the last decade, the city’s population has increased by more than 12%. In only a few years' time, the population is expected to eclipse 500,000, according toWorld Population Review. The increasing population and equally impressive gains in the real estate market suggest wholesalers can thrive for the foreseeable future.
Only a short drive from Denver, the Colorado Springs real estate market received much attention during the pandemic when more people were looking to escape big cities. Today, the influx of demand continues; that, combined with increasing home values, represents an excellent opportunity for wholesalers.
Grand Rapids is one of the popular mid-sized metro areas in the Midwest, including western Pennsylvania and Ohio. In particular, Grand Rapids is one of the best cities for first-time homebuyers, according to SmartAsset. Thanks largely to its affordability, livability, and employment opportunities, Grand Rapids attracts an entire generation of buyers who need starter homes. Investors who can facilitate their transactions stand to benefit immensely.
Median home values in Grand Rapids are significantly below national averages, which is why the city attracts many first-time homebuyers. Fortunately for wholesalers, those first-time buyers need homes, which is why Grand Rapids rounds out the list.
Wholesaling real estate is an investment strategy that has shot to superstardom in real estate investing. The reasons why wholesaling houses has become a wildly popular investment strategy are relatively simple – real estate investors have recognized that real estate wholesaling is quite profitable, especially for a market operating in Phase II (a.k.a., expansion) of the real estate market cycle.
Wholesalers search for potential real estate wholesale properties and profit-generating opportunities. Properties are often distressed properties (priced below market value) owned by financially-challenged sellers (i.e., foreclosure). When a wholesaler finds an investment that meets their criteria, they enter a contract with one of the homeowners selling a viable investment – for an agreed-upon price within a specified timeframe.
The executed contract awards the wholesaler (or any buyer) equitable interest as defined by the Doctrine of Equitable Conversion.
Equitable conversion is the legal standard that awards the wholesaler/buyer legal title - ’owner-in-equity’ of the subject property.
This equity ownership is the asset in which you, as the wholesaler, can freely market and sell. Equitable interest is the only asset you hold that can be sold without a real estate licensee, realtor, or the need to become a real estate agent for yourself.
An experienced real estate wholesaler actively networks with various real estate-related professionals, hard money, and traditional lenders, plus a buyers list that would likely - include many cash buyers.
But how does a wholesaler begin to know how to evaluate a real estate deal in a market objectively? Should it be a rental property or a multi-unit? The answer is usually highly personal and depends on the wholesaler’s experience, skill, resources, and professional goals. The good news is that since the digital marketplace has established a stronghold in real estate, wholesaling is no longer largely dependent on one’s physical location. Virtual wholesaling is now available and successfully practiced by many wholesalers.
The Market’s growth rate during the past two years is representative of property values growing on steroids. And while record growth has impressed and awarded investors more than once since mid-century modern furniture was in style, the past 24 months can undoubtedly be viewed as one of the all-time top performance periods. This remarkable real estate growth during recent years was energized by:
What is certain is that this unprecedented growth is unsustainable, although no one can know exactly when a shift in the market will occur.
And a shift may not necessarily be as gloomy as it sounds because, in the world of wholesaling, new market metrics define new opportunities for clever real estate investors who can shift strategies on the fly to align with modified market conditions.
Before you can determine if the market or city is suitable, you need to have a firm understanding of the wholesale process, the laws that govern, and the market specifics in which you plan to operate. The following demographic and economic indicators should be considered when evaluating a market’s investment viability.
Note that the national data included below is a benchmark used by wholesalers considering new investments. Specific market metrics impact differently – depending on the wholesaler, the neighborhood, the market, and the state.
Home values have experienced every end of the spectrum in as little as four years. Heading into the pandemic, prices appreciated year-over-year since 2012. It is important to note, however, that prices rose because of supply and demand issues; there simply weren’t enough homes to keep up with demand. As a result, prices peaked around 2022.
That pandemic also fueled an influx of homebuying, as government stimuli and record savings put more money in people’s pockets. The pandemic is also responsible for historic inflation, and the Federal Reserve will stop at nothing to end the weaker dollar. In doing so, the Fed raised interest rates, which ultimately curtailed a decade’s long runup in home values.
Despite the slowdown in appreciation, the median home value in the United States is about $348,853, up 1.2% year-over-year and about 55% higher than five years ago.
Pro Tip: Market cycles inevitably change. Stay tuned to the Market and adjust strategies as conditions warrant.
Days On Market, which indicates the time it takes for an accepted offer. The DOM offers an insight into the competitive demand for the subject in its local market. The smaller the DOM, the more likely that demand will outpace supply.
Demographics, like statistics regarding population, area income, and population growth, offer valuable data regarding the area in which you hope to invest. Demographic data can provide trending insights. Population trends impact demand and thus real estate prices. For example, the Millennial generation is now ranked as the largest, with buying power that cannot be overlooked in investment analysis.
Interest rates fluctuate for several reasons. Economists use interest rates as a tool to help control the economy. The most significant impact is a change in Prime Rate by the Federal Reserve Bank. The FED attempts to tame Inflation or encourage growth by making money more (or less) expensive to borrow. The FED’s latest move is designed to cool a red-hot inflationary marketplace.
Lower rates attract more buyers because each dollar buys that much more of a house.
Interest rate changes can significantly influence a person's ability to purchase a residential property. It can impact wholesalers who use mortgage funds as a tool to complete the wholesale deal.
Pro Tip: Wholesaling real estate requires little capital – usually just a small percentage of the agreed-upon price, known as an earnest money deposit that is held in escrow. Interest rates have no impact on the money that is not borrowed.
"This index uses the value of 100 to represent the position of someone earning a population’s median income, with values above 100 indicating that an item is more likely to be affordable and values below 100 indicating that an item is less affordable. Points below 100 indicate that a median family may struggle to qualify for a mortgage on a home in the area, while a value of 100 indicates that the typical family has exactly enough income to qualify."
Affordability is a complex index– dependent on variables like relative income, GDP, interest rate adjustments, and home values, among others. The following graphically shows the somewhat complicated interrelationship of these factors.
Successful wholesalers understand the mechanics of wholesaling before diving in headfirst. When you have learned how to wholesale real estate, the many available market metrics can provide incredible insightful information to the trained eye. It is, as they say, hidden in plain sight.
But any way you look at it wholesaling real estate is a very profitable investment technique in many different cities and markets. To properly utilize this technique and learn the strategies that go into this process a wholesaler must seek proper guidance and training to build up a successful career. They must also learn to remain within the legal boundaries when wholesaling houses in whichever city they choose to launch their real estate wholesaling business.
To avoid having to make rookie mistakes, many new real estate investors enroll in wholesale real estate classes to learn how to get into wholesale real estate stat!
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