Lesson 1: What is wholesaling?

.Lesson 1: What is Wholesaling?

Real estate wholesaling is an investment strategy where an investor finds a distressed property, gets it under contract, and then assigns the contract to an end buyer for a profit—all without ever purchasing the property.

How Wholesaling Works:

1. Find a Motivated Seller – Look for distressed properties or owners who need to sell quickly (e.g., pre-foreclosures, inherited homes, tax liens, etc.).

2. Negotiate a Below-Market Price – Secure a purchase agreement at a discount.

3. Find a Cash Buyer – Market the deal to investors who want to rehab or rent the property.

4. Assign the Contract – Sell your rights to the purchase contract to the cash buyer for an assignment fee.

5. Close the Deal – The buyer completes the purchase directly from the seller, and you collect your fee at closing.

Why Wholesaling is Popular:

• Requires Minimal Capital – Since you don’t buy the property, you don’t need a large upfront investment.

• Quick Turnaround – Deals can close within weeks instead of months or years.

• No Renovations Needed – Wholesalers don’t fix up properties; they just pass them on to investors who do.

• Great Learning Experience – A great way to learn real estate investing fundamentals without financial risk.

Common Misconceptions:

• Wholesaling is Not Illegal – While some states regulate it, wholesaling is a legitimate real estate strategy when done correctly.

• You Don’t Need a Real Estate License – In most states, wholesalers do not need a license unless they market properties in a way that suggests ownership.

• You’re Selling a Contract, Not the Property – Wholesalers assign purchase rights, not the actual real estate.