Wholesaling Real Estate: The Complete Beginner's Guide

Wholesaling is finding deeply discounted properties and assigning your purchase contract to another buyer for a fee. You never actually buy the property—you sell your right to buy it. Think of it as being a deal finder who gets paid for connecting motivated sellers with cash buyers.

No money needed: You're not buying the property, so you don't need capital or credit. No renovation risk: You assign before closing, avoiding rehab headaches. Fast profits: Deals can close in 2-4 weeks versus months for a flip. Learn the market: Every deal teaches you about values, repairs, and buyer preferences.

Your entire business depends on finding people who need to sell quickly at a discount. Sources include: driving for dollars, pre-foreclosure lists, probate leads, absentee owners, tax delinquent lists, and expired listings. Consistent marketing to these sources is your primary job as a wholesaler.

Calculate your Maximum Allowable Offer (MAO): ARV × 70% - Repairs - Your Fee = MAO. Leave room for your end buyer's profit. If the numbers don't work, move on—there are plenty of deals. Never force a deal by inflating ARV or underestimating repairs.

Most sellers won't accept your first offer. That's expected. Your job is making enough offers that some stick. Use scripts for initial contact, but be genuine—you're solving problems, not tricking people. Follow up consistently; most deals close on the 5th-12th contact.

Use an assignable purchase contract with an assignment clause or "and/or assigns" after your name. Key terms: purchase price, earnest money, inspection period, and closing date. Keep inspection periods long enough to find a buyer (14-30 days). Have a real estate attorney review your contracts.

Without buyers, you can't close deals. Build your list before you need it: attend REIA meetings, network with flippers and landlords, post in Facebook groups, and market your deals. Qualify buyers—you need real cash buyers who can close fast, not tire kickers.

Once you have a buyer, execute an assignment agreement transferring your contract rights for a fee. Your buyer brings the funds to closing, pays your assignment fee (typically $5,000-$25,000), and closes on the property. You walk away with a check without ever owning the property.

Overpaying for properties: Your buyers have MAO limits too. Not following up: 80% of deals come from follow-up, not first contact. No buyers list: Build this before you get deals under contract. Shady practices: Be transparent about your role—it builds reputation and repeats.