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Wholesaling Houses

Wholesaling Houses: The Ultimate Guide For Beginners (2024)

real estate investing strategies wholesale real estate May 29, 2024

If you've been considering a career in real estate but are held back by the hefty capital requirements, you should consider wholesaling houses. This investment strategy is quickly emerging as one of the most popular ways to invest in the housing market without having to own physical property or tap into a large savings account. In fact, wholesaling houses awards investors the ability to make quick profits while simultaneously maintaining liquidity and mitigating risk.

Despite its popularity and relative ease compared to flipping and renting, however, wholesaling houses still requires a proven system for success. Investors must implement effective strategies to navigate the process efficiently. The rest of this guide is dedicated to teaching you everything you need to know about wholesaling properties, ensuring you have the tools and knowledge to thrive in the wholesaling market, starting with the following:

When you are ready to elevate the wholesaling strategies you learn in this article, enroll in Real Estate Skills' free training program to take advantage of all the opportunities in today's market. This program will provide you with expert guidance and advanced strategies to help you succeed. Sign up now and start maximizing your potential in real estate wholesaling!

What Is Wholesaling Houses?

Wholesaling houses bridges the gap between property sellers and potential end buyers in the real estate industry. House wholesaling involves an investor – the wholesaler – who secures a contract with a property seller, only to subsequently assign or sell that contract to another buyer, typically another investor.

The beauty of wholesaling real estate lies in its simplicity: wholesalers seek properties priced below market value, often those needing repairs or with motivated sellers. Once an under-valued property is under contract, the wholesaler seeks an interested buyer willing to pay a slightly higher price.

The difference between the contracted price and the amount the end buyer is willing to pay becomes the wholesaler's profit. This approach, which avoids the complexities of traditional property ownership and direct property sales, has emerged as an attractive introduction for beginners in the real estate industry.

By wholesaling, newcomers can engage in real estate transactions and earn profits without heavy capital investments or the challenges of rehabbing and property management.

Read Also: Wholesaling Real Estate - Step-by-Step PDFs [FREE DOWNLOAD]

How To Start Wholesaling Houses Step-By-Step

Wholesaling houses has emerged as a popular entry point for those new to real estate investing. With limited capital or a desire to take on the responsibilities of property management, many turn to wholesaling as a method to dip their toes in the industry.

As stated above, this strategy facilitates a transaction between a property seller and a buyer, profiting from the agreed prices.

Wholesaling

 Here's a step-by-step guide to help you understand how wholesaling houses works:

  1. Market Analysis & Research
  2. Locate a Distressed  Property
  3. Assessing the Deal
  4. Engage with the Seller
  5. Reeling in the Buyer
  6. Assign the Contract
  7. Rinse & Repeat

1. Market Analysis & Research

A market analysis is the first and most important step you should take when you begin wholesaling houses. It allows you to better understand your market, thus empowering you to identify properties you should pursue and the level of competition you should anticipate. This step lets you identify and understand the risks you'll encounter, allowing you to develop mitigation strategies earlier.

Market analyses and research help you understand the laws and regulations you should comply with so you can avoid trouble in the long run. So be sure to perform a comprehensive one. Research market trends, local market indicators, inventory levels, comparable sales, market downturns, local regulations, and even your competition.

2. Locate A Distressed Property

Now that you're well aware of the conditions of your target market, the next step is finding a wholesale property. Here are some excellent sources to start with:

  • The Multiple Listing Service (MLS): Some private sellers assign a real estate agent the task of listing and finding a buyer for their property. However, you'll need to put in extra elbow grease to find undervalued or distressed properties, as most properties on the MLS are usually in good condition and sold at fair market value.
  • Network With Industry Professionals: Since they're always in the market, local Realtors, real estate agents, and brokers are usually well-informed about where distressed or undervalued properties are in your target area. You can tap into their market knowledge by networking with them, easing the property-finding process. Attend local real estate seminars, workshops, and meet-ups, or join their social networks and pages to establish connections with them.
  • Real Estate Auction Sites: Properties on real estate auction sites are usually sold below market value because they're sold as-is, making them pretty ideal for wholesaling. Subscribe to these sites to capitalize on the sales.
  • Foreclosure List: Foreclosure homes are valuable for wholesaling. To build a list of foreclosures, you'll pursue wholesaling, check out county courthouses, and online foreclosure listing services.
  • Local Courthouses: Foreclosure listings, probate homes, and tax liens properties are filed into local courthouse records. These records are accessible to all by request, so be sure to check them out for leads.
  • Direct Mail Campaigns: Direct mail allows for in-depth personalization, enhancing the chances of a response from a property owner. Incorporate it into your marketing strategy.
  • Driving For Dollars: Another way to find a wholesaling process is to cruise around your target market looking for distressed properties. While “driving for dollars,” look for signs that may indicate distress, such as foreclosure signs, an overgrown lawn, or a run-down property.
  • Real Estate Wholesaling Software: Integrate software tools like PropStream or DealMachine into your lead generation strategy. They often feature vast property databases you can search when wholesaling houses.

3. Assessing The Deal

Found a property that may be ideal for wholesaling? Excellent. Now, evaluate its wholesaling potential. Doing so enables you to assess its profitability potential and identify potential risks before committing to it fully. It also gives you the knowledge you need to negotiate terms that maximize your profit margin. So, start by researching the property's fair market value using comps and occupancy rates. Also, calculate cash on cash returns and factor in repair costs to determine the after-repair value and the maximum allowable offer. This thorough assessment ensures you make an informed decision regarding each wholesaling property, thus maximizing your wholesaling success.

4. Engage With The Seller

Contact the seller if you're satisfied with the property's wholesaling potential. Tell them what you are and emphasize the benefits of working with a wholesaler to sell their property. Note that most average property owners don't know about wholesaling, so be sure to explain how the process works. Once this is out of the way, present your offer and discuss the wholesale real estate contract. Explaining everything clearly and transparently depicts you as an expert in your trade, making the seller more likely to trust you. Also, prepare a compelling offer and clearly articulate your intentions of assigning the property.

5. Reeling In The Buyer

Have you secured the contract for wholesaling houses? Congrats! Now, the end buyer is the only thing standing between you and finalizing your first wholesaling deal. Tap into the networks you built earlier and ask them for referrals, as they often have networks of investors looking for good deals. Remember, as a wholesaler, you can’t market the property; you can only assign your right to buy the house, so keep that in mind when looking for an end buyer.

6. Assign The Contract

Once you find the buyer, it's time to reassign the wholesaling houses contracts. Negotiate the terms of the assignment agreement with the end buyer, as your earnings depend on this step. If you're on the same page, draft an assignment agreement outlining the terms and the new purchase price. Also, notify the seller of the arrangement, and if all parties agree, sign the contract and ensure that the end buyer completes the purchase transaction with the seller. Once the title transfer process is complete, you'll receive compensation from the buyer for facilitating the transaction.

7. Rinse & Repeat

With your first house wholesaling deal done, repeat the process to find your next deal. Remember that the real estate market is dynamic, with new opportunities and challenges arising regularly. Similarly, each wholesale deal you encounter will present unique challenges and opportunities. Stay open to learning and adapting your wholesaling process to the changing market conditions and challenges you'll experience with each deal. This flexibility will ensure your long-term success. You can start learning today by signing up for our free real estate training program. It covers strategies like wholesaling more comprehensively, equipping you with the knowledge to wholesale houses like a seasoned investor.

Read Also: How To Find Real Estate Deals: The Top 10 Proven Methods


*For in-depth training on real estate investing, Real Estate Skills offers extensive courses to get you ready to make your first investment! Attend our FREE training and gain insider knowledge, expert strategies, and essential skills to make the most of every real estate opportunity that comes your way!

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Pros & Cons Of Wholesaling Houses

Real estate investing is vast, multifaceted, and filled with various avenues for potential investors. Just as every investment method, wholesaling houses comes with its own set of advantages and disadvantages.

Before diving headfirst into wholesaling, it's crucial to weigh its pros and cons to determine if it aligns with one's financial goals, risk tolerance, and investment acumen:

Pros Of Wholesaling Homes

  • No Cash Investment Required: Real estate wholesaling does not require cash investment, down payments, credit score reviews, or monthly mortgage payments. That means you avoid saving and financing to get cash investment. These are the major hurdles for people who want to venture into real estate investment.

  • Quick Money: If you buy below-market-value investment properties, you will quickly earn a good return on your investment. In fact, you can make good money within days or months because no renovation is involved.

  • A Great Starting Point: Real estate wholesaling is a great place to start investing in real estate because it does not require a great credit score or cash investment. You can even do it with little experience because it’s easy to learn and it involves little risk.

  • No Property Maintenance & Management Involved: Wholesaling eliminates the hassles of property repairs and management, which are passed on to the buyer.

Cons Of Wholesaling Homes

Real estate wholesaling has disadvantages, too. Here are some of them:

  • No Regular Income Generated: To get paid while wholesaling houses, you need to keep generating deals consistently. When a house is wholesaled, it no longer generates income for you as an investor.

  • It’s Not Effortless: Yes, it may be a quicker and easier way of making money for a real estate investor. However, a comparative analysis of the market is required to find houses for sale below the market value. Getting buyers also requires networking and effort.

Wholesaling is a great way to invest in real estate. However, the pros and cons of wholesaling real estate should be considered when making the decision to venture into it.

Breaking Down An Example Of Wholesaling Houses

To better grasp the concept of real estate wholesaling, let’s walk through a practical example.

Imagine a neighborhood where many of the properties are well-maintained and have a market value of around $200,000. However, there's one particular house that has seen better days. The owner, Mrs. Smith, inherited the house from her late uncle. Since inheriting the property, she hasn’t had the funds or inclination to maintain it, and it has fallen into a state of disrepair.

Mrs. Smith has been thinking of selling the property but believes that she can't get a decent price due to its condition. At this point, she has received a few low-ball offers, but nothing that piqued her interest.

Enter Jack, the real estate wholesaler. Jack is always on the lookout for distressed properties and potential deals. He approaches Mrs. Smith with an offer to put the house under contract for $160,000. Jack believes that, with some renovations, the property could be brought up to the market value of its neighbors.

After some negotiation, Mrs. Smith and Jack agreed to the terms, and the house was put under contract for $160,000. Jack immediately starts leveraging his network of investors and property flippers. Within a week, he finds an investor, Mr. Thompson, who's keen on buying properties to renovate and resell.

Jack offers the contract to Mr. Thompson for $180,000, citing the potential value of the property post-renovation. Recognizing a good deal, Mr. Thompson agrees. The deal closes, with Mrs. Smith receiving her $160,000 and Jack pocketing a cool $20,000 in profit without ever actually buying the property.

This example highlights the role a wholesaler plays in bridging the gap between homeowners who want to sell but might not know how to get the best deal and investors looking for lucrative opportunities. Jack's expertise and network allowed him to find a win-win solution for both Mrs. Smith and Mr. Thompson while also making a tidy sum for his efforts.

What Types Of Property Can You Wholesale?

House wholesaling

Different real estate investors implement different investment strategies. The goal is to use the simplest methods to make more money in their real estate investing. Essentially, there are different tactics and levels of flipping houses through wholesaling. Once you venture into the real estate wholesaling industry, you can wholesale different types of properties. These include:

  • Single-Family Houses: Since most people know the dynamic of single-family houses, they form a great and straightforward niche for wholesaling. Some of the properties in this category include fourplexes, triplexes, and duplexes.

  • Condos and Townhomes: Condos and townhomes are individual title units. This makes it easier to wholesale and flip them. In fact, their wholesaling mechanics are similar to those of single-family houses.

  • Mobile Homes: Some people overlook mobile homes when investing in real estate. However, these can be profitable just like other properties. You can wholesale both new and used mobile homes as well as mobile home parks. The affordability factor creates a great resale market for mobile homes despite their limited financing.

  • Apartment Buildings: New real estate investors can be discouraged from investing in apartment buildings due to their size, unit number, and dollar amounts. However, their mechanics are similar to those of single-family houses. Sellers, buyers, and financing can be different depending on price and size, but this doesn’t have to make wholesaling apartment buildings complicated. Funds and savvy investors wholesale apartment buildings by getting the right connections and prices.

  • Commercial Real Estate: Commercial real estate includes office buildings, warehouses, retail malls, and mixed-use buildings. These are contracted at low prices and flipped to other investors. The new investors can operate them to generate cash flow, renovate and then reposition them, get new tenants, and flip them. Commercial real estate wholesaling is largely about connections and prices.

  • Property Rights: Properties can be split up into different rights. This helps in turning assets into different ways of profiting. For instance, an investor can lease land and then sell off mineral and oil rights. They can also auction air rights. Timber and access rights can also have value.

  • Land & Lots: Vacant land and lots can be wholesaled too. These include individual parking lots, infill lots, tear-down buildings, as well as large acreage lands. These properties are easy to wholesale, reposition, and market.

There are different types of properties that you can wholesale. As long as you know the right thing to do, have the right network, are creative, and have an open mind, there are many opportunities you can explore.

Flipping Vs. Wholesaling Homes

What is wholesaling houses

Wholesaling is a concept where an investor or real estate wholesaler finds a deeply discounted property, puts it under a contract, and assigns the rights to the contract to an end investor or takes advantage of double closing to get a closing fee. Typically, wholesaling a house does not require renovation.

Flipping on the other hand is a concept where a real estate investor buys a property at a discounted price, adds value to it through strategic repairs, and then resells it at a profit.

When a property is sold to a seasoned investor, fewer people are involved in a wholesale deal. You also don’t have to worry about contractor management, contractor paperwork, time management, appraisals, budgets, inspections, and market risks among other factors, as you would with flipping.

Nevertheless, wholesaling can mean giving up a lion’s share when it comes to profits. That’s because if you buy the property at a discounted price and renovate it, you can get a much higher profit than when you sell it without repairs. However, wholesaling is quicker, especially when a property is sold to an experienced investor. What’s more, wholesaling is the best option when you don’t have enough money to buy the house or pay for insurance, utilities, attorney fees, closing costs, and taxes.

Read Also: Flipping Real Estate Contracts: A 6-Step Guide For Investors

Do You Need A License To Wholesale Houses?

In most cases, you don’t need a license to wholesale houses. But, each state regulates real estate brokerage on its own terms. Therefore, there are definitions of the activities that require licenses in each state. Licensing codes have a lot of ambiguity, vagueness, and gray areas in some states. These can complicate the issue.

What’s more, if your real estate business practices and techniques vary beyond the scope of real estate wholesaling, it might not be clear how your state authorities will view it. Nevertheless, there are several benefits to acquiring a real estate license when you are interested in the wholesaling business.

For instance, this license gives an investor access to multiple listing services which is a great property leads source. It can also open you up to networking opportunities. These can be quite helpful over the years.

Can Beginners Wholesale Houses?

Whether wholesaling real estate for beginners is ideal for you or not will largely depend on what you are interested in. For instance, wholesale real estate investing is ideal for you if you want to venture into real estate but don’t have the financial means. It’s also good for you if you have an eye for properties that are considered distressed and great negotiation skills. When done correctly, wholesaling real estate takes time to master, but the rewards are significant.

Essentially, you should conduct some research and locate experienced real estate wholesalers to advise you. Also, invest time in locating motivated sellers and distressed properties. You should also familiarize yourself with wholesaling contracts.

If you’re looking for a step-by-step process to help you start and grow your wholesaling business without spending a dollar in marketing, check out our brand-new free training and start scaling your real estate business today!

Can You Start Wholesaling Houses With No Money?

Yes. Real estate wholesaling entails contracting sellers to buy discounted properties and re-marketing them at higher prices, assigning contracts to new buyers before closing, and never taking title. A wholesale makes a spread from the price contracted originally and the amount a new buyer pays or a fixed fee.

For a fix and flip property, a wholesaler sells the opportunity to buy a property without taking title. The wholesaler gets an assignment fee just for being an intermediary. Nevertheless, it’s important to have your contracts reviewed by an experienced real estate lawyer to ensure that assignment contingencies are included and escrow funds held.

Read Also: How To Wholesale Real Estate With No Money

How Does A Wholesale Real Estate Contract Work?

A wholesale contract usually involves three parties: the property owner, the wholesaler, and the end buyer. The wholesaler enters this contract with the property owner first to purchase the property at a specified price; this gives the wholesaler similar rights as the property owner, meaning they can sell or assign the contract to another buyer. 

By signing this contract, the property owner agrees not to entertain other offers during the contract period, giving the wholesaler exclusive rights to buy the home. The wholesaler then seeks an end buyer, usually another investor, willing to purchase the property at a higher price.

The wholesaler then reassigns their equitable rights to the end buyer through an assignment agreement, leaving them to complete the purchase transaction directly with the original property owner. In this arrangement, wholesalers usually profit from the difference between the original and final purchase price. 

wholesale real estate contract pdf

Wholesaling Houses: Frequently Asked Questions (FAQ)

Wholesaling houses is a multifaceted real estate strategy that comes with its fair share of intricacies. It's only natural for both beginners and experienced individuals to have questions about the process, legality, profitability, and challenges involved.

Let’s address some of the most common inquiries to give you a clearer understanding of this real estate endeavor:

Is Wholesaling Houses Legal?

Yes, wholesaling houses is legal, but it must be done correctly. It involves assigning contracts and ensuring compliance with state and local regulations. Always consult with a real estate attorney to navigate the legal aspects of wholesaling in your specific area.

However, there are several components of wholesaling houses that you should know about. Each state has its own rules and regulations. Therefore, it’s advisable to seek advice from experienced real estate wholesalers before venturing into this business. Talk to experienced real estate investors and a real estate attorney because there are grey areas that you should know.

The assignment aspect of wholesaling in particular is surrounded by controversy. This is the part where the wholesaler gets a contract for a property before selling it to a buyer to get an assignment fee.

Some people think that this is illegal since it is brokering real estate license-free. However, wholesaling real estate is legal as long as it’s done right. However, just like with any other exit strategy, investors must follow the law.

Essentially, the wholesaler should have a bilateral contract with the seller. This contract should state that the wholesaler is getting equitable interest. The wholesaler should also prove that they intend to buy by providing a funds letter as their proof. After acquiring the property under contract, the wholesaler can now find a buyer.

Is Wholesaling Real Estate Worth It?

When done right, real estate wholesaling is worth the resources invested in it. In fact, it’s a great way to venture into real estate investing. Wholesaling is diverse, which makes it a lucrative addition to the real estate business.

Wholesale deals are about finding motivated sellers ready to sell their rights and negotiate on their properties. You then find buyers who want to buy those properties at markups of your choosing. Upon closing the deals, you sell to investors at higher prices.

Original property sellers are happy because wholesalers get them out of bad situations. Wholesalers are also happy because they get properties and sell them risk-free and at a profit. End investors are happy because they get properties without marketing. They also make more money after rehabilitating them.

How Do You Make Money Wholesaling Houses?

You make money wholesaling houses by finding properties below market value, securing them under contract, and then selling the contract to an investor or buyer at a higher price. The difference between your contract price and the selling price is your profit. This process involves little to no investment in the property itself, focusing instead on finding deals and connecting buyers.

Is Wholesaling Real Estate Ethical?

Yes, wholesaling real estate is ethical, as long as wholesalers are completely transparent with all parties involved. Transparency ensures there is no room for misunderstanding, and everyone understands the terms of the transaction. Ethical wholesaling involves clear communication, honest intentions, and adhering to legal and ethical standards in all dealings.

Is Wholesaling Houses Legit?

Yes, wholesaling houses is a legitimate investment strategy that allows anyone to earn sizable checks without purchasing property themselves. But you have to be careful to avoid getting into legal trouble.

Wholesaling is legal everywhere in the country, but your local state or county may have specific laws relating to the practice of wholesaling that you should review before getting started.

Also, be honest and upfront when approaching buyers and sellers so you aren't accused of being deceptive. Wholesaling is a legitimate strategy, although you'll have to be patient and disciplined if you want to make money doing it.

Is Wholesaling Real Estate Still Profitable in 2024?

The real estate landscape is ever-evolving, and with each year, new challenges and opportunities arise. In 2024, while the market may present its unique uncertainties, wholesaling remains a viable strategy.

Given the fluctuating property values and a rising number of motivated sellers, wholesalers play a pivotal role in connecting such sellers with potential investors. As long as you're aligning with market demands, conducting diligent research, and building a strong network, wholesaling can prove to be a profitable endeavor. It's essential, however, to maintain integrity and offer genuine value to both sellers and buyers to ensure sustained success in this field.

What Is Virtual Wholesaling?

In real estate, virtual wholesaling is simply wholesale real estate that is done via electronic means. It involves the purchase and sale of properties through online references, computers, smartphones, and fax machines. What makes virtual wholesaling advantageous is the fact that investors can spread efforts across different markets. This maximizes their return on time & their investments.

What Is Reverse Wholesaling?

When it comes to real estate wholesaling, finding a cash buyer that has the right means to purchase the property is the most difficult part. Reverse wholesaling is the concept of getting this hard step out of the way before you start the search for a good property. That means you find a buyer before you find a property.

Investors that start by finding cash buyers do not feel pressured by the contract terms. Essentially, they do not face deadlines for closing in on deals. That way, they avoid paying out of their pockets or being responsible for buying houses they get under contract.

What Is a Buyer’s List?

A buyers list, commonly used in wholesaling real estate, is a list of real estate investors who've shown interest and are usually ready to buy investment properties from a wholesaling investor. This list, typically built and maintained by the wholesaler, features these investors' names and contact information.

Where Can I Find Houses To Wholesale?

Distressed houses are the best to wholesale. That’s because they are easy to buy under the market value. Essentially, a distressed off-market property is in disrepair or property whose owner wants to sell quickly. Finding such properties enables wholesalers to sell a house under contract at a price higher than what they used to put it under a contract.

What appeals to most people in real estate wholesaling is the low capital required. Therefore, those new to this form of investing look for inexpensive or free ways of locating distressed properties. However, seasoned investors have other means of locating distressed properties.

Some of the major places to find houses to wholesale include:

Some wholesalers use other methods to find properties to wholesale, including placing bandit signs, working with a real estate agent whose specialty is investment properties, and mailing flyers.

How Do You Get House Under Contract For Wholesaling?

As a wholesaler, you'll have to develop a unique strategy for finding leads and getting properties under contract. But here are the basic steps you should follow.

  1. Find A Motivated Seller: The first step is to find motivated seller leads who may be willing to sell quickly and at a discount. There are various ways you can locate property owners looking to move quickly. You can drive around your neighborhood looking for run-down houses and then check public records to find the property owner's information. You can also post bandit signs or ads on Craigslist. You'll want to target sellers who want to close quickly either because they're experiencing financial difficulties or going through a life event that requires them to move quickly.

  2. Make Them An Offer: Next, you'll make them an offer. When negotiating, you'll want them to agree to the lowest price possible so you can sell it to an investor and still earn a decent fee. Most flippers use the 70% rule when looking for a deal, meaning they will pay up to 70% of the home's after-repair value. So, if the property is worth $250,000 and in good condition, try to get the seller to agree to a price below $175,000 so you can pocket the difference. It's also wise to build an extensive buyers list before making an offer so you already know what investors may be willing to pay.

  3. Have Them Sign A Wholesale Contract: After accepting your offer, secure the deal by having the seller sign a wholesale contract. This could be a standard real estate agreement with an assignment clause or a wholesale assignment contract, bypassing property closure. While most motivated sellers don't demand earnest money, you might request it from your end buyer for commitment. Always consider seeking legal advice to ensure the contract's legitimacy.

What Are Wholesaling Exit Strategies Once I Have A House Under Contract?

A wholesale deal entails having a wholesaler or real estate investor acting as a middleman between a property buyer and a property seller. The wholesaler finds a cheap property and sells it quickly to make a profit. A real estate wholesaler puts a house under contract and sells the contract or assigns it to a buyer to make a profit.

Thus, finding a person to assign or sell the contract to and make a profit is the exit strategy in wholesaling. The strategy saves the investor time and it’s a low-risk approach. Many property investors look for real estate wholesalers because they locate profitable properties faster.

What’s The Best Way To Find Cash Buyers For Wholesale Deals?

Finding a cash buyer should be done quickly because the contract for the property has a settlement date that should be adhered to. But, when starting out, a real estate wholesaler might not have a buyers list. This necessitates finding them.

Some of the ways to find cash buyers for wholesale real estate deals include:

  • Find Cash Buyers now in one minute or less using my Google Ninja Trick!

  • Advertising properties on websites like Zillow and Craigslist.

  • Distributing flyers with information on the property in the neighborhood.

  • E-mail property information to the investors you come across at networking events.

When contacted by buyers, save their contact information and names even if they do not buy the property. Come up with a spreadsheet with the contact information of potential buyers and use it in the future to share details of the properties you will want to wholesale.

Check out this quick video that talks about how you can find cash buyers for free!

How Do Wholesale Real Estate Contracts Work?

A wholesale real estate contract stipulates how the property will be purchased from its owner and assigned to an investor before the property is actually bought. The reason for assigning a wholesale real estate contract for houses is to minimize upfront costs for wholesalers when purchasing properties.

A wholesaler uses their contract in order to include clauses and language that benefits them. For instance, a wholesaler can include a clause that gives them an out in the event that they do not sell the house. The clause states that if the wholesaler hasn’t found a partner or a buyer, as worded by the contract, they are not obliged to buy the property. This clause eliminates the need or risk of raising money to buy the property if they do not find a buyer.

Another clause entails property assigning. This clause says that the investor can wholesale the house to any business or anyone without informing the seller; this means the wholesaler is allowed to sell the property contract without putting out funds to buy the house first.

Generally, it’s advisable that you read and understand the contract before you sign it. If you have questions or if there are clauses you don’t understand, consult your lawyer.

What Does A Wholesale Real Estate Investment Company Do?

A wholesale real estate investment company finds great deals on distressed properties, puts the properties under contract, and then assigns or sells the right to those contracts to end buyers. The end buyers are usually investors in real estate.

In simple terms, a wholesale real estate company executes contracts with property sellers, markets contracts to potential buyers, and then assigns those contracts to buyers. The profit made by the wholesale real estate firm is known as the assignment fee.

This is the difference between the price contracted with the original seller and the amount that the end property buyer pays. Profit potential in the real estate wholesale industry is massive when it comes to servicing the real estate investors’ needs. That’s because investors are always in search for high-equity properties.

Most real estate investors have tight schedules managing their fix and flip projects as well as rental properties. Thus, they may not have time to find the properties to invest in. This increases the demand for wholesale properties and real estate wholesaler services.

Can I Wholesale A House With A Realtor?

Yes. A wholesaler can use a real estate agent to wholesale an MLS property. Acquiring and selling deals via a realtor or MLS can work when a real estate wholesaler finds a good match.

Essentially, you should start by finding the right real estate agent who needs business and is open to the idea of working together, appreciating commissions, and being loyal. Once you have found an ideal partner agent, flipping houses will realize that negotiating prices for flipping houses in exchange for higher business volume and making even one percent per deal will be easier.

Wholesaling a house with a realtor has the following benefits:

  • Liability protection because the realtor acts as the bulletproof vest of the wholesaler.

  • You save money because you hire a realtor and pay them based on performance instead of hiring a virtual assistants team to find and evaluate deals.

  • Realtors do the work of finding and evaluating deals, sending offers, cranking out marketing, and negotiating. This gives wholesalers free time and priceless peace of mind.

The most important thing is to find the right realtor to work with. You can attend our free online workshop on how we've been wholesaling houses from the MLS for years!

What Are The Best Books On Wholesaling Real Estate?

Reading top-rated books on wholesaling real estate is a great way to ensure your continual growth. These books will expand your real estate wholesaling knowledge, change how you perceive wholesaling real estate, and help you focus on a particular niche. There are many books on wholesaling real estate but here are some of the best ones.

  1. The Book on Investing In Real Estate with No (and Low) Money Down by Brandon Turner

  2. Building Wealth One House at a Time by John Schaub

  3. The E-Myth Real Estate Investor by Michael Gerber

  4. The Real Estate Wholesale Bible by Than Merrill

  5. The Art of Wholesaling Properties: How to Buy and Sell Real Estate by Aram Shah and Alex Virelles

Whether you are venturing into wholesaling real estate or you’ve already completed the first deals, these books will boost your industry knowledge, confidence, and profits.

What’s The Best Real Estate Course For Wholesaling Houses?

The best wholesale real estate course for wholesaling houses teaches the learner how to get started and excel in real estate wholesaling. It simplifies wholesaling real estate by showing the learner what real estate wholesaling is, how it works, as well as how to get started and excel.

The Pro Wholesaler VIP Program is the best wholesale real estate course. It focuses on helping learners start hyper-profitable wholesaling businesses faster. This course provides a fun, fast, and convenient way to learn the best ways to grow a real estate wholesaling venture.

Final Thoughts On Wholesaling Houses

Wholesaling houses is a short-term real estate investment strategy that can earn decent money quickly and efficiently. You also avoid the risk and high cost of buying the property you want to wholesale. However, the journey entails a learning curve—mastering the art of finding distressed properties, honing negotiation skills, and finalizing lucrative deals is crucial.

Now that you know how to wholesale real estate and recognize the opportunities in today's market, take your skills to the next level by enrolling in Real Estate Skills' free training program. This program will provide you with the knowledge and strategies needed to excel and maximize your success. Don’t miss out on this valuable opportunity—sign up today and start benefiting from expert guidance and insights!
 


*Disclosure: Real Estate Skills is not a law firm, and the information contained here does not constitute legal advice. You should consult with an attorney before making any legal conclusions. The information presented here is educational in nature. All investments involve risks, and the past performance of an investment, industry, sector, and/or market does not guarantee future returns or results. Investors are responsible for any investment decision they make. Such decisions should be based on an evaluation of their financial situation, investment objectives, risk tolerance, and liquidity needs.


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Founder & CEO of Real Estate Skills, Alex Martinez, reveals the systems and processes used to wholesale and flip houses without doing any marketing!

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No matter where you start, you can become a successful real estate investor. Listen to these amazing stories from the students in our program!