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How Does Wholesaling Real Estate Work?

Many would-be real estate investors find wholesaling to be a great entry point into the field of investing. With its process of finding under-valued properties and either selling them outright or assigning the contract to a buyer — without doing any repairs on the property — wholesaling is a great way to learn the craft of real estate investing while making money in the process.

But what does being a real estate wholesaler entail? What do you need to do (daily) to achieve your real estate wholesaling goals? And what does a typical day for a real estate wholesale investor look like?

Here’s a quick look at a typical eight-hour day for a full-time real estate wholesaler.

How Does Wholesaling Real Estate Work?

Wholesaling real estate is a process that consists of finding a property with potential, putting that property under contract, and “selling the rights” to that property — so to speak —to another investor for a finders fee. Often compared to day trading stocks, real estate wholesaling is a great way for beginners to get their businesses up and running if they have little liquid capital to start.

There are two ways to successfully close a wholesale real estate deal. Firstly, the double close, which is when buyer A purchases a property, closes on the deal, and then re-sells the property to buyer B. Secondly is the “assignment of the contract,” which is when buyer A puts a property under contract but adds an “assignment clause” to the contract that allows them to pass the rights to another buyer (i.e., buyer B). Buyer A is then paid by buyer B a percentage of the cost of the property.

To learn more about the comprehensive process of wholesaling real estate, check out our beginner’s guide to wholesaling. If you think you have what it takes, keep reading for an action plan that will lead you to success.

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