Wholesaling real estate usually involves one investor providing a discounted property (usually 60% – 70% below market value) to another real estate investor who can pay cash for a quick close. Wholesaling requires no money down, no credit, and no licensing. A real estate wholesaler’s success is predicated almost entirely upon hard work, good judgment, and a reliable network of buyers.
When wholesaling real estate, the wholesaler doesn’t actually buy the property. Instead they control it for a limited amount of time by putting it “under contract” with a seller, until they find a buyer. Wholesalers generally make no improvements to the property because they do not technically own it. In essence, wholesalers get paid for finding and researching the deal, tying it up via a contract so no one else can buy it, then providing the buying opportunity to another person. A wholesaler may have a little money, a lot of money, or no money tied up in the deal—depending on their agreement or contract with the seller.
Wholesalers save buyers’ lots of time by doing the background research on a property. They provide prospective buyers with lots of information—comparable sales, after repair value estimates, photos, rental rates, tax assessments, etc. A wholesaler needs to have enough detailed information that “proves” to a buyer that the deal is really a deal. When wholesaling real estate, a wholesaler makes money by “marking up” the property. For example, he contracts directly with the seller to buy a house for $50,000 but the buyer he finds purchases it directly from the seller for $55,000. The wholesaler gets the $5,000 difference.
Wholesalers shouldn’t be confused with “bird dogging.” Although similar in purpose, “bird dogs” generally inform prospective buyers about a property after minimal research and effort. They do not tie up the property or have any agreement with the seller the way a wholesaler would. Bird dogs are then paid a smaller commission by the buyer, perhaps $500 – $1,000, for basically alerting them to a deal they would not have otherwise known about. The bird dog’s job is then completely done. The buyer negotiates directly with the seller to purchase the property.
If you’re interested in wholesaling real estate, your first investment should be in your own education. Talk to local wholesalers and also consider purchasing an online real estate course from an expert wholesaler who makes their living at it. Theories are fine, but you want to learn from experienced investors who take action and are successful.

















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