What Is A Real Estate Wholesale Deal?

By: Eddie Case
Submitted: 09:53AM on Saturday 20 June 2009

Here is how a wholesale deal makes you and I quick money deal after deal! Let's break it down!

First: You find a motivated seller, Someone who really needs to sell badly. You make a wholesale priced offer (usually 40 to 60 cents on the dollar) and get that property under contract with that seller. In this example we will say that the house's fair market value is $100,000.00 and we got the seller to agree to sell it to us for $50,000.00. We have it under contract for 50 cents on the dollar!

Second: You find a buyer that wants to purchase the property you just put under contract with the motivated seller, and he agrees to buy it from us for let's say $60,000.00. He realizes that he is getting a $100K property for 60 cents on the dollar and that he is getting a great deal on a property worth 100K when fixed up!

Third: We then go to closing and we buy it for $50K from the motivated seller and complete that transaction. Then, we turn right around immediately and resell that same property to our buyer that we found who wants to buy the property from us at 60K and complete that transaction.

So, what have we done: We paid $50K for the house and we turned right around and sold the house for $60K the SAME DAY, and we make a quick $10,000.00! This was a win-win-win deal for all parties involved, and here's why:

1.) The original seller unloaded a problem house and moved on with their life!

2.) Our buyer just bought a GREAT piece of real estate at a wholesale price that he will now rent for cash flow or fix and resell at a nice profit.

3.) And you (the wholesaler) pocketed $10,000.00 for combining a motivated seller with a motivated real estate investor buyer!