Wholesaling is finding a property a seller needs to sell fast, putting it under contract at a price an investor would love, and then assigning that contract to the investor for a fee — without ever owning the house. It is the lowest-cash way into real estate and the fastest way to learn what a deal looks like. It is also where beginners get burned by bad repair estimates, weak contracts and sellers who feel taken advantage of. This guide covers finding sellers, estimating ARV and repairs, the math, the contract, building a buyer list, assigning cleanly and staying on the right side of the law.
Understand the model and the law
Here is the whole business: you sign a purchase agreement with a seller at $130,000. Your contract allows assignment. You find an investor who will pay $140,000 for that contract. You assign it; the investor closes with the seller; the title company pays you $10,000 at closing. You never owned the house and never needed a loan.
Your fee exists because you did the work of finding the deal and negotiating it below what the investor could find on their own. Investors pay for good deals delivered. They do not pay for retail-priced houses with a fee tacked on.
Legally, you can sell your own contract. What you cannot do in most states is market the property itself as if you owned it or represented the owner — that is brokerage and requires a license. Market the contract, disclose that you are the equitable buyer, and several states now require specific disclosures or registration for wholesalers. Read your state's rules before your first deal.
Checklist
- Understand: you sell your contract, not the house
- Check your state's wholesaling disclosure and licensing rules
- Decide: assignment vs. double close (Step 8)
- Commit to full disclosure with every seller and buyer
Build your buyer list first
Most beginners find a deal and then scramble to find a buyer. Do it backward. Before you ever talk to a seller, know exactly who buys in your target area, what they pay and what they want: flippers want cosmetic fixers in good school districts; landlords want cash-flowing rentals in specific ZIP codes; BRRRR investors want heavy fixers with strong ARVs.
Find them at the county recorder (cash purchases in the last year), at local investor meetups, on investor forums and by calling "we buy houses" signs and asking what they are looking for. Ask each buyer: what areas, what price range, what condition, how fast can you close, how much proof of funds can you show?
Twenty serious, verified cash buyers beats a list of 2,000 emails. Verify by asking for proof of funds and a recent closed deal. When you have a contract, you want to make five calls and have the deal sold by evening.
Checklist
- Pull recent cash buyers from county records
- Attend two local investor meetups
- Interview buyers on area, price, condition and speed
- Verify proof of funds for your top 20
Find motivated sellers
A motivated seller has a problem that speed and simplicity solve better than price: pre-foreclosure, inherited property, tax delinquency, code violations, divorce, relocation, a tired landlord with a problem tenant, or a house in disrepair they cannot afford to fix. These sellers exist in every market, every month.
Sources: public records (pre-foreclosure notices, probate filings, tax liens, code violations), driving for dollars (noting neglected houses and looking up the owners), direct mail and text to targeted lists, and online. On MLS9, sellers requesting instant offers and long-days-on-market listings are already telling you they want a simple sale.
Marketing is a numbers game — expect to talk to 30–50 sellers to find one deal at the start. Track every lead and follow up for months; most deals close on the fifth conversation, not the first.
Checklist
- Pick two lead sources and work them consistently
- Build a list from probate, pre-foreclosure and code violations
- Track every lead and follow-up date
- Watch MLS9 instant-offer requests and long-DOM listings
Nail the after-repair value
ARV is what the house will sell for once fully renovated. Everything else in the deal flows from it, so get it right. Pull sold comps within a half mile from the last six months that are renovated, similar in size (within 20%), age and style. Ignore active listings and ignore unrenovated sales.
Adjust for differences and be conservative — round down. Your buyer will run their own comps and if your ARV is $20,000 high, you lose the buyer and your credibility. Three renovated sales that agree within 5% is a solid ARV; if the comps are all over the place, the neighborhood is telling you something.
Verify by driving the comps. A "comparable" sale that backs up to a highway or sits in a different school zone is not comparable. MLS9 shows recent sales and estimated values for every property; use it to start, then confirm on the ground.
Checklist
- Pull 3–5 renovated sold comps, 6 months, half mile
- Adjust for size, beds, baths, garage, lot
- Round down; buyers will check
- Drive the comps
Estimate repairs like a contractor
Walk every property with a checklist and a camera. Big-ticket items first: roof (age and condition), HVAC (age, does it run), water heater, electrical panel (fuses or breakers, brand, capacity), plumbing type (galvanized or polybutylene is a full replace), foundation cracks, windows, and any signs of water intrusion.
Then cosmetics by room: kitchen (cabinets, counters, appliances), bathrooms (fixtures, tile, vanity), flooring, paint, doors, trim and fixtures. Learn your local unit costs — a rough full cosmetic rehab runs $20–$35 per square foot in many markets; add roof, HVAC and systems on top.
Until you have done several, bring a contractor and pay them for the walk. Then add a 10–15% contingency. Underestimating repairs is the single most common way wholesalers lose buyers, because the buyer's contractor will find what you missed.
Checklist
- Inspect roof, HVAC, water heater, panel, plumbing, foundation, windows
- Estimate cosmetics room by room with local unit costs
- Bring a contractor on your first several walks
- Add 10–15% contingency
Do the math backward from the buyer
The standard formula: Maximum Allowable Offer to the seller = (ARV x 70%) minus repairs minus your fee. The 70% covers your buyer's profit, holding costs, financing and selling costs. In hot markets buyers stretch to 75–80%; for rentals, landlords may pay more than flippers because they are not selling.
Example: ARV $250,000 x 70% = $175,000. Minus $35,000 repairs = $140,000, which is what your investor will pay. Minus your $10,000 fee = $130,000, your maximum offer to the seller. If the seller needs $150,000, there is no deal — move on rather than squeeze your buyer or fee to make it work.
Know your buyers' actual numbers. If your landlord buyers pay 80% of ARV for rent-ready houses in a specific area, your MAO is higher there. The formula is a starting point; your buyer list is the truth.
Checklist
- MAO = ARV x 70% − repairs − fee
- Adjust the percentage to what your buyers actually pay
- If the seller needs more than MAO, walk
- Run every lead through the Wholesale calculator
Get it under contract properly
Use a state-standard purchase agreement, not something downloaded from a forum. Key terms: price, earnest money (keep it small but real — $500 to $1,000 — deposited with a title company, not handed to the seller), an inspection period of 10–14 days that lets you exit for any reason, a closing date of 30 days that leaves room to market, and the phrase "and/or assigns" after your name or an explicit assignment clause.
Disclose in writing that you intend to assign the contract to another buyer and may profit from doing so. Ethical wholesalers do this every time; it protects you legally and avoids a furious seller at closing who feels deceived.
Close through a title company that handles assignments regularly. Open title as soon as you sign so any liens, heirs or title problems surface while you still have time.
Checklist
- State-standard purchase agreement with assignment language
- Small earnest money held by the title company
- 10–14 day inspection period, 30-day close
- Written disclosure of intent to assign
Market the contract and assign it
The day you sign, send the deal to your buyer list: address, ARV with your comps, repair estimate with photos, your price, and the closing date. Serious buyers respond within hours. Show the property in one or two blocks rather than one at a time; scarcity moves buyers.
Collect a non-refundable assignment deposit from the buyer — typically equal to your fee or a large part of it — when they sign the assignment agreement. It is credited to them at closing; if they back out, you keep it. Verify their proof of funds before you stop marketing to others.
When the fee is large or you do not want the seller and buyer seeing each other's numbers, a double close (you buy and immediately resell, using transactional funding for a few hours) keeps them separate. It costs more in closing costs and funding fees but avoids friction on big spreads.
Checklist
- Send the deal package to your list the day you sign
- Show in blocks; create urgency
- Collect a non-refundable assignment deposit
- Choose assignment vs. double close based on spread size
Close and get paid
Send the assignment agreement to the title company. They prepare the settlement statement showing the seller receiving your contract price, the buyer paying the assigned price and your fee paid to you at closing. You typically do not attend; the seller and buyer sign and the title company wires your fee.
Stay involved until it records. Buyers get cold feet, appraisals (if the buyer is financing) come in low, and sellers panic. Your job is to solve problems until the deal closes — that is what your fee is for.
Afterward, ask the buyer what they would pay for the next one and what they thought of your numbers. Send the seller a thank-you. Both are your best sources of future deals, and reputation is the whole business.
Checklist
- Deliver the assignment agreement to title
- Confirm your fee on the settlement statement
- Solve problems until it records
- Debrief the buyer and thank the seller
Turn it into a business or a springboard
After a few assignments you will know your market's ARVs, repair costs and buyer appetite better than most agents. Two paths open. One: scale wholesaling with systems — consistent marketing, a CRM, an acquisitions process and a growing buyer list. Two: keep the best deals for yourself and become the investor, using BRRRR or a flip on the properties your buyers would have paid you for.
Most successful investors did some version of the second. Wholesaling teaches you to find and evaluate deals; the fees fund your first down payment; and the buyer list becomes your network of lenders, contractors and partners.
Whichever path, keep the standards that got you here: honest ARVs, conservative repairs, full disclosure and deals that are genuinely good for the seller and the buyer. That is what makes the phone keep ringing.
Checklist
- Systematize marketing and follow-up
- Keep a deal for yourself when the numbers justify it
- Track fees and reinvest in your first down payment
- Protect your reputation on every deal
Common questions
Do I need a real estate license to wholesale?
In most states you can assign your own purchase contract without a license, but several states now require disclosures or registration, and marketing the property itself (rather than your contract) can cross into brokerage. Check your state's current rules.
How much money do I need to start?
Earnest money of $500–$1,000 per deal (held by a title company) plus your marketing budget. No loan, no down payment. A double close requires transactional funding, which lenders provide for a fee.
What is a typical assignment fee?
$5,000–$15,000 is common; larger on expensive properties or deep discounts. The fee is whatever spread exists between your contract price and what a verified buyer will pay.
What if I cannot find a buyer?
Your inspection contingency lets you cancel within the inspection period and recover your earnest money. This is why you build the buyer list first and keep the inspection period long enough to market.
Is wholesaling ethical?
It is when the seller knows exactly what you are doing, gets the speed and certainty they wanted, and the buyer gets a real deal. Disclose that you intend to assign and profit, and never pretend to be the end buyer.