Wholesaling

Wholesaling is a real estate strategy in which an investor puts a property under contract with the owner and then sells that contract, or the property, to another buyer for a higher price. The wholesaler earns the difference, usually through an assignment fee or a double closing, without renovating or holding the property.

Wholesalers make money by finding owners who want a fast, simple, as-is sale and matching them with cash buyers, landlords and rehabbers. Most of the work is finding and talking to owners; probate estates, pre-foreclosures, tax-delinquent properties, code violations and absentee owners are common sources. A growing number of states regulate wholesaling, with rules such as written disclosure to the seller, cancellation rights or a license requirement when the wholesaler markets the property to the public. Be clear with sellers about your intent to assign or resell. Rules vary by state; confirm with a local real estate attorney.