I Used to Write Off Wholesaling: Here’s What Changed My Mind

by | BiggerPockets.com

For those of you that know me, this article may come as quite a shock! I have nine flips in progress, and technically, I have never wholesaled a house.

In the past two years, I have learned so much about investing from my blog and BiggerPockets, it is mind blowing. I thought I knew it all when I started my online journey, since I have been buying and selling flips for years as well as buying rental proprieties. I realized I did not know it all very quickly when I started hearing terms like the “70 percent rule,” which I had never heard of.

Once I got over the fact that there was a lot I did not know, I started to soak in as much information as I could. I am now a much better investor, making much more money than when I first found the online real estate investing world.

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My Initial Viewpoint on Wholesaling

When I first heard of wholesaling, I knew what it was, but I had never researched it or paid much attention to it. I did well with flipping, and I thought wholesaling was a lesser form of investing.

Over the last year, I have learned a lot about wholesaling and have had to put my own personal beliefs to the side — because I realized they were wrong. My first thoughts about wholesaling was it was a way to try to start investing in real estate without much money, but that most people failed at it and that there was not much profit in it.

I then saw some people having success with wholesaling, and I discovered direct marketing and how you can get more deals moving away from the MLS. I thought wholesaling had a place in investing for those looking to start learning the business and their market. I thought, Wholesaling is a great way to learn to find deals, which is a very important skill to have in the real estate investing world.

Then, this last week, I attended a meeting with some very high level real estate people from throughout the country.  The common theme was they all wholesaled properties, except for me.

Why Wholesaling May Be Better Than Flipping Houses

When I discussed with other investors what we did and how we made money, people were not very impressed when I said I flipped 10-15 houses a year. In fact, a few had a look of how can you do that and stay sane? I quickly discovered that many in the group were making more money wholesaling than I was flipping houses — and they had no intentions of “moving up” from wholesaling to flipping. In fact, a growing group of investors had gone from flipping to wholesaling. Their thoughts were that it took less money to wholesale, there were fewer headaches involved, and you can do so many more deals wholesaling than flipping that it was by far a better business model.

Related: 3 Tips for Wholesalers From an End Buyer’s Perspective

After some deep thought about my own business, I was starting to think they may be right. Here are some advantages to wholesaling properties:

  • No cash is needed when you wholesale if you use an assignment of contract or double close
  • No contractors are needed when you wholesale
  • The buyers are investors who are paying cash; no financed offers and picky owner occupied buyers
  • You don’t hold houses for months while they are being repaired and listed
  • You eliminate the risk of a market change when holding properties for months

Less Money Per Deal in Wholesaling?

Wholesaling a house usually nets less money than when you flip one, but not always. On my flips, I usually average about $30,000 in profits, but it takes me six months to flip a home because I am constantly waiting on contractors.

Although I might make $30,000 on a flip and a wholesaler may make $5,000 to $10,000, they can do five wholesale deals in the time I can do one flip. Given the time it takes to flip a home, I am not making more money than if I were doing more deals.

How Many Wholesale Deals Can Be Done a Month?

The guys I met with are doing 5 to 15 wholesale deals every month and making on average over $5,000 on each wholesale deal. That is a lot of money, and they never have to hire any contractors!

Related: 8 Killer Resources for Savvy Low-Budget Wholesalers!

One of my biggest headaches is contractors and getting to them to fix houses in a quick manner. When I saw the money these guys were making wholesaling, I had to completely rethink my business and how I was doing things. They were making more money with wholesaling than I was flipping, and they had a lot less risk.

It takes a lot of work to wholesale that many properties. It takes a lot of direct mail, a lot of follow up, great staff working for you and a great system. The funny thing is, I have most of those things already in place; I just need to change the way I do business.

Will I Stop Flipping and Become a Wholesaler?

No, I don’t think I will stop flipping, because even after all the contractor headaches, I still love doing it. But I may still start wholesaling more properties and only keep the flips with the most profit. I am going to change the way I market to people, and hopefully, I will have many more deals that I can wholesale or flip and make money in both worlds.

What’s your opinion on wholesaling? Is this an avenue of real estate investing you’d be willing to try?

Leave me a comment with your thoughts on wholesaling below!

About Author

Mark Ferguson

Mark Ferguson is a has been a real estate investor and real estate agent/broker since 2002. He has flipped over 165 homes in that time, including more than 70 in the last three years. Mark owns more than 20 rental properties that include single family homes, as well as commercial properties, including a 68,000 square foot strip mall. Mark has sold more than 1,000 homes as a real estate agent and is the owner/managing broker of Blue Steel Real Estate in Greeley, Colorado. Mark started the InvestFourMore blog and website in 2013, which has hundreds of article on real estate. Mark is constantly sharing his insights, case studies, and interesting things that happen to real estate investors on both his blog and well-known sites like Forbes.


  1. Adrian Valdez

    I think wholesaling is an amazing. It allows people like me who have had the worst year ever financially to be able to rebound and start filling the bank accounts again. and if you get good at it it allows you to transfer into a more long term goal (buy and hold or creating a business).

  2. Daniel Francis

    My opinion is whatever the deal dictates. Flip it, wholesale it, keep it, take it down Sub2, list it…. any deal is a win so do the deal that feels right for that house/situation. When you do your own marketing and you are finding sellers, the real power comes from being ready to do anything with it!

  3. Larry Russell

    Excellent post! I use to look at flipping and wholesaling as work and not investing. But at the end of the day, it’s all work if you’re looking to replace your job income with real estate investment activities. As Daniel stated, “whatever the deal dictates” is my current philosophy and new approach to real estate investing.

  4. joseph ball

    Newbies see this and think they have discovered the golden secret. As an experienced investor, you know that wholesaling and “flipping” are sophisticated transactions, requiring experience and more. It isn’t what you may see on TV. It is not for newbies.

    • Mark Ferguson

      Joseph, What do you suggest newbies learn if they should stay away fro flipping and wholesaling? I think newbies should decide what they want to do no matter what it is and put all their efforts into it until they have mastered it. We were all newbies at one point.

      • joseph ball

        I think NEWBIES should start by learning the basics. Buy a bread and butter 3/2 in a reasonable neighborhood. Rent it. Manage It. Sell it. Learn small. Maybe buy another, then two more. After some experience, try other venues, such as flipping, wholesaling, building, retailing, notes, other. But not until they learn. If I were an investor approached by a NEWBIE, I would talk first, to learn experience level. If a NEWBIE, I would respectfully make an excuse to leave. I simply don’t think it is the place to start.
        I enjoyed your article.

  5. Kristi Patton

    So, I have heard a lot about wholesaling on different podcasts, but admittedly I don’t understand exactly what it means to wholesale a property. Is there a spot on this site that describes the exact definition and process of a wholesale that a total newbie can understand?

  6. Frantzces Lys

    Great post! I’m starting with wholesaling to build some capital but you really have to be a marketing genius and a savvy negotiator. It takes practice, testing and much evaluation. It’s a business. I think wholesaling in between what your major niche is a great idea. While you’re waiting 6 months to finish a rehab and close you could still wholesale in between. Of course every thing takes time and effort. Thanks for sharing!

  7. Joe McCall

    This is a great post. I have said the same thing for years. I too used to look down on “Wholesaling”, thinking it wasn’t sexy or sophisticated enough for me. I wanted the “BIG” deals. Little realizing that there are a whole lot less spinning plates and moving parts in wholesaling – plus a lot less risk.

    You can rehab a deal and make good money. But look at how much you have at risk when doing fixing and flipping houses. Plus, in the same amount of time that you rehab and sell that house, you could have wholesaled 6 houses.

    This is why I argue that wholesaling should be what beginners learn first – before they start rehabbing houses. Rehabbing takes much more skill. It should not be where someone starts. Learn the ropes with wholesaling. Learn how to find great deals first.

  8. karen rittenhouse

    Hi Mark:
    Our thought process went much like yours! We spent the first 5 years buying our holds, the next couple of years doing flips, now we’re full time wholesalers (to pay off our holds) and LOVING IT!!

    As you found, we can make about as much wholesaling as flipping with way less time/money/effort. We’ve sold 16 wholesale deals in the past 21 days and have purchased about 50 in the past 10 months. We avoided wholesaling for years and now find it to be our newest passion.

    Good luck to you with yours!

    • Brandon Delk


      Obviously a real old thread, but I’m just now studying to begin REI. I’m curious how you are locating that many properties. I know there are certain programs to which you can purchase a subscription to find vacant houses and such, but outside of vacancies, it seems as though in my Atlanta market, there isn’t much meat on the bone to appeal to an end buyer, and for me to make anything off of it.

      • karen rittenhouse

        @Brandon Delk
        We spend a lot on direct mail marketing – about $15,000 per month, and have been doing direct mail marketing since 2007.

        The only way to find great discounted deals is to speak directly with the seller and most of that comes through direct mail marketing. You must get to where the seller is calling you and not already on some list that every one is purchasing.

        Thanks for asking!

  9. Mark I’m so glad you wrote this blog. I have been actively wholesaling since July and I have been very successful at it. All my brothers are in contracting trades so I will soon move on to doing flips as well. But my ideal business plan is to only do one flip at a time while still scaling my wholesaling business up and up. Thanks for your post and have a blessed day.

  10. Ellen Kuzniar

    Mark, great information. My plan is to get my business set up early 2015. My goal is to start in wholesaling also as my financials could definitely use some help. I have been doing lots of reading and attending my local Creative Investors meetings. Thanks for sharing this story.

  11. Sharon Vornholt

    Excellent post Mark-

    You have outlined some of the reasons I like wholesaling. There is less risk and I have at times made as much money (or more) that folks made that had a problematic flip. You get in (and out) quick.

    I think what every investor needs to understand is that it is not a “one or the other” proposition. You can add wholesaling to any other investing strategy and use those chunks of cash to have a safety net on rehabs, pay down rentals or for your monthly expenses while you also work on your “favorite” real estate investing strategy.


  12. Larry T.

    I’ve only wholesaled a couple of properties and only by happenstance. But I know the big investors in my area wholesale in addition to other things. And I view it as one of the essential investing skills that I need to acquire. It is part if the real estate investing vertical, to speak in business talk. I need to be able to source my own deals. Besides, like you intend, wholesalers often keep the best deals for themselves. I want some of those “best” deals.

  13. Larry Wood

    I have only wholesaled two properties so far but I love it. My circumstances being what they are and my age, wholesaling is going to be my primary focus. All the pro reasons stated are so true. I am hoping to create a list of dependable solid buyers and basically be working for them finding the properties they desire to purchase. B

  14. hadrian farrow

    Great article Mr Ferguson i am a Newbie and i have been looking for a starting point and seeing that i am already scared i will play it safe for the time being, and try the wholesaling as my vehicle to advance my goals as an investor, but i do need some assistance. i hope u can lead me to the right source. thank you!

  15. Anne James

    Mark, thanks for the article. It was good to hear others affirm wholesaling as an essential skill in real estate investing which can be added to any other investing strategy. Also, it was encouraging to hear wholesaling is a good place to start as a new investor. Since joining the PB community, I read and heard “find a good deal.” From what I am reading, acquiring and honing the wholesaling skills aids the real estate investor in recognizing profitable deals.

  16. I am curious about how you go about finding properties to wholesale and negotiating to get them at a good price. I have been doing short sales and it is pretty simple and basic how to find them and explain the situation and options really. However, I have wanted to get into wholesaling, mostly because it has always been a big interest, but I have been having a hard time trying to find properties. Moreover, once I find a property I am not sure how to even approach them because for the few I have found they are always asking above market value. Do you have any suggestions? Anything would be helpful. Thank you!

  17. Brian Gibbons

    Interviewing Cash Buyers is the first step to Wholesaling, knowing the area and what kind of terms and how much of a rehab are they willing to do it whether not they have financing either through IRAs or through Hardmoney.

    It’s a little bit like dating: one cash buyer will not buy one another cash buyer will buy, location, ARV, ow much and type of repairs, etc.

    • Robert Langley

      Hi Patricia, Hopefully you’ve already received your answer. Thought I’d add for others, like myself, who just came to this article. Much about real estate involves being upfront about what your intentions are. If someone (i.e. Buyer or Seller) does not agree or like what you are doing, then it is probably best to just move on. At least you rest easy that you were transparent with your intentions.
      I believe that a lot of the contention people have towards “investors” in general is due to investors that are either being shady or they do not disclose.

  18. ron woods

    Wow Mark, you just turned me all around. I’m trying to wholesale in build up cash to flip, and your telling me I would generate more cash in less time by wholesaling. Hmmm. Many thanks for your take on this.

  19. Robert Langley

    Be safe… For those unlicensed and interested in wholesaling. Make sure you know the federal and state laws concerning the assignment of contracts. Notice that Mark is a Broker, so it is likely legal for HIM and other brokers or licensed agents acting on behalf of a broker.
    It is going to be to your advantage to speak with a lawyer before getting slapped with a fine by the RE related authorities. At least, get to know the laws for your state’s RE authority.

    Not sure if I’m repeating this as a comment. I skipped over a few comments to see if there were any recent comments.

  20. Garrick Hall

    where do i find assignment contracts and purchase and sale agreements for my state, im know to real estate and i’m getting started with wholesaling.
    i understand the concept now i’m need to know where to get the contracts from?

  21. Joseph A Fazekas III

    Hello All – I am currently pursuing my RE Agent license. Will me being a licensed agent allow me to legally operate wholesale deals or would I need to pursue the RE Broker license? I am based in New Jersey. Thank you!

    • karen rittenhouse

      Hi Joe:

      You don’t need a real estate license to legally wholesale properties. The reason is that you purchase the property and resell it so, because you’re the owner, you don’t need a real estate license. The transaction becomes just like a for-sale-by-owner. For any property you are personally involved with, you don’t need a license.

      If you are listing or selling for others, you are the middle man and in those transactions you need a real estate license. Being a licensed agent is mostly a retail job. Real estate investing is a whole different profession!

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