The Ultimate Beginner’s Guide to Real Estate Wholesaling


Real estate wholesaling is one of the most popular strategies for new investors to get involved with because it can be done with limited funds and experience.

But it’s definitely not all it’s cracked up to be.

I recently realized that BiggerPockets did not have one ultimate source of information about wholesaling. So… I thought I’d take up the banner and give myself a place to send people when they ask about wholesaling. It is my hope that this ultimate guide will give you a great starting point for understanding how wholesaling works. Consider this a foundation upon which you can build your wholesaling business.

I’ve made an attempt to be as thorough as possible while still maintaining some brevity, so to aid in that goal I’ve included multiple links to other great BiggerPockets content that I don’t need to repeat. I encourage you to open each and every one of these links into a new tab on your browser and read them all.

Yes, it might take a few hours.

But if you are serious about building serious income from wholesaling, it might be the best investment you’ll ever make.

Finally, understand that no matter how long I make this post, I could never cover everything there is to know about wholesaling. There are too many “but.. what about” and “but… what if”s. Instead, I want to encourage you to ask your questions either in the comments below this post or in the Wholesaling Forum here on BiggerPockets. The Forums are an incredible place to ask your question and get answers from dozens of successful investors. And it doesn’t cost a thing.

With that, let’s get to the Ultimate Guide to Wholesaling.


How to Invest in Real Estate While Working a Full-Time Job

Many investors think that they need to quit their job to get started in real estate. Not true! Many investors successfully build large portfolios over the years while enjoying the stability of their full-time job. If that’s something you are interested in, then this investor’s story of how he built a real estate business while keeping his 9-5 might be helpful.

Click Here For Your Free eBook!

What is Real Estate Wholesaling?

Wholesaling is a term used in the real estate industry to describe the process of finding great real estate deals and getting paid to bring them to real estate investors. It’s similar to a “finder’s fee,” but with some added paperwork thrown in to make it more legal and acceptable.

Wholesaling can seem a little confusing, so I find it best to illustrate the concept with an example of how it’s done.

Jim is a wholesaler. He actively markets for incredible real estate deals, but doesn’t actually want to buy them. On a cold January morning, Jim gets a phone call from Deborah. Deborah wants to sell her home, but doesn’t want to use a real estate agent. She tells him that the house is in bad shape, and she just wants to get out before she lets it go back to the bank in a foreclosure.

Jim meets with Deborah at the home and offers her $50,000 for the property. Deborah agrees to the price and they sign a contract – a purchase and sale document. This document states that Jim (or someone else he sells the contract to) will buy the home for $50,000 within the next 21 days.  

Jim then goes and talks with his friend Tom, an active house flipper. He shows all the numbers to Tom, and Tom decides that this property would be a good flip. Tom agrees to pay $55,000 for the property and knows he can make a good profit at that price.

Jim and Tom then sign an “assignment contract” where Jim gives Tom the right to buy the home from Deborah (because remember, the contract between Jim and Deborah said that either Jim or someone else will buy the home. This is known as an assignment, and we’ll go into more detail in a bit on this).

Jim gives all the paperwork over to the local Title company to process. In the end, Deborah gets her $50,000 price she asked for. Tom (the flipper) pays $55,000 for the house. And Jim, the wholesaler, keeps the $5,000 difference as his wholesale fee.

Jim never owned the property, but made $5,000 for bringing together Tom and Deborah.

Keep in mind, this is just one common way that wholesale deals are put together, and there are many other possible ways to structure a deal.

Related: Is Wholesaling the Best Way to Get Started in Real Estate? An Investor’s Analysis

Now that you have a basic understanding of what wholesaling is, let’s move on and talk about one of the most common questions people have: can I wholesale without a lot of money?

Real Estate Wholesaling Illegal

Is Wholesaling Illegal?

[Editor’s Note: Please be aware that this material does not serve as legal advice. To safely practice wholesaling, be sure to consult Federal and State laws specific to your area before executing any deals.]

One of the more “hotly debated” topics on BiggerPockets is concerning the legality of wholesaling. In fact, one of the most popular threads on the BiggerPockets Forums right now talks about how wholesalers in Ohio are getting fined by the State for their “illegal practices.”

Scary stuff for any wholesaler!

I am not a lawyer, and laws like this are very state-specific, but allow me to share my opinion on the subject. As with any business transaction, you should consult an attorney before engaging in any kind of real estate activity.

What’s Illegal About Wholesaling?

The essence of the debate on whether wholesaling is illegal revolves around the term “brokering.”

Although each state has its own definition, a broker is someone who helps put a deal together.

Related: The Ultimate Beginner’s Guide to Real Estate Wholesaling

Here is how the state of Florida defines a broker:

“‘Broker’ means a person who, for another, and for a compensation or valuable consideration directly or indirectly paid or promised, expressly or impliedly, or with an intent to collect or receive a compensation or valuable consideration therefore, appraises, auctions, sells, exchanges, buys, rents, or offers, attempts or agrees to appraise, auction, or negotiate the sale, exchange, purchase, or rental of business enterprises or business opportunities or any real property or any interest in or concerning the same.” (source)

Here in Washington State (where I live), brokering is defined as the

listing, selling, purchasing, exchanging, optioning, leasing, renting of real estate, or any real property interest therein…” and “Negotiating or offering to negotiate, either directly or indirectly, the purchase, sale, exchange, lease, or rental of real estate, or any real property interest therein.” (source)

Those who argue that real estate wholesaling is illegal claim it to be illegal because the wholesaler is acting as a “broker” in the deal without being licensed.

Those who defend wholesaling without a license say that wholesaling is not brokering, but simply signing a contract and then assigning that contract to another, and therefore the law does apply to this situation. They are not selling a property, but simply selling the ownership of a real estate contract. (Check out this video on YouTube for more on that position.)

To further complicate the situation, there is the issue of “marketing” a property that you do not currently own. Most states also include “marketing a property” as brokering. For example, if Jim the wholesaler, who buys a property from Deborah and then sells it to Tom. Had Jim put the ad for the house on Craigslist or elsewhere, is he marketing the property? Most definitely! But what if he wasn’t marketing the property? What exactly defines marketing? If Jim knew the cash buyer Tom and told him about the deal, is that marketing?

If you were to ask ten different lawyers, you might get ten different answers.

However, I do believe the way many wholesalers work could be considered illegal.

Putting a deal under contract, marketing the deal all over Craigslist, and then assigning that deal is a fast way to get fined by your state government and get a nice misdemeanor on your record! 

As Dave J. asked in the forum conversation about Ohio wholesaling, “What is your intent and how comfortable are you if you have to defend that position if you find the local real estate commission asking questions?” 

The Right Way to Wholesale?

Therefore, how does one protect oneself from breaking the law? Here are a few tips that I believe (again, this is my opinion. You should talk to an attorney.)

1.) Get Your License: Simple. No one can accuse you of brokering without a license if you have a your license. Yes, this might cost you a couple grand, but it’s better than getting a penalty from the state for breaking the law!


2.) Buy the Property and Then Sell the Property: We’ll talk more about this process later in this post, but rather than “assigning” the contract, simply buy the property and then re-sell it (even if you only own it for 5 minutes, through a “double close”). Again, we’ll talk about this later.

The truth about wholesaling is this: Whether or not wholesaling is illegal in your state, it definitely flirts with a line.

If you want to see how close to that line you can get, fine. That is your choice.

However, if you want to be sure that you are operating your wholesaling business as pure and solid as possible, get your license or physically close on the property, take title, and then sell it after. 



Can I Wholesale With No Money Down?

Yes… and no.

As you saw in the example above, it is possible to wholesale without money. However, the one thing I glossed over in the story above is how Jim got the phone call from Deborah.

I’ll tell you this: he didn’t get it by sitting around in his undies playing Call of Duty.

Wholesaling is a marketing game, and the best wholesalers are the best marketers. And marketing is rarely free (though there are ways).

Instead, Jim likely spent a significant amount of time and money to get this phone call. We’ll talk more about that in just a moment, but understand this: wholesaling can be done without money, but not without effort.

If you are interested in learning more about the various no money down strategies involved with wholesaling, flipping, or landlording, I hope you’ll pick up a copy of The Book on Investing in Real Estate with No (and Low) Money Down here on BiggerPockets. (I wrote it, and there is an entire chapter dedicated to wholesaling. It’s like this post you are reading… on crack.) But anyway, let’s move on.

The rest of this post is dedicated to showing you the effort it might take to become a great wholesaler. But first, let’s talk about my beef with wholesaling.

house hack

My Problem With Wholesaling

Everyone loves wholesaling.

And what’s not to love? It sounds just so stinkin’ easy. Just find a good deal and find a cash buyer and … boom. Done.

So why don’t I recommend most people start with wholesaling?

Here’s the truth: wholesaling is one of the most difficult avenues to make money with real estate.

Now, that’s something you don’t hear the gurus say often. In fact, most of the real estate gurus and trainers encourage people to start with wholesaling because it’s so easy, and it can be done with no money down!

But here’s my beef: most wholesalers fail because it’s hard.

To be good at wholesaling, you need to be good at:

  • Knowing the math behind a good flip
  • Knowing the math behind a good rental
  • Talking with motivated people in distressed situations
  • Negotiating without taking advantage of people
  • Marketing for leads that cost less than the marketing does
  • Answering the phone
  • Sales
  • Finding good deals
  • Estimating the after repair value
  • Estimating rehab costs
  • Estimating potential rents

See what I’m getting at? Sure, you can outsource some of this stuff, but as the business owner, you still need to be the one in charge and you need to know how all this works.

In other words: To be a good wholesaler, you need to be good at a lot of stuff.

Furthermore, you are competing with other investors who don’t need to make that wholesale fee and therefore can pay more than you. For example, in the story above, Tom ended up paying $55,000 for the property, so he could have simply found Deborah first, and if Jim and Tom ended up competing, Tom could pay $55,000, but Jim would need to pay $50,000. Who do you think Deborah is going to go with? Tom, of course!

A wholesaler needs to find great deals and thus needs to work harder to find those deals. And if you want to get what no one else will get, you have to be willing to do what no one else will do: Hustle.

I don’t say this stuff to discourage you — only to dispel any belief that this wholesaling game is “easy” and “quick.” It’s a job, a business. It’s work.

However, for those willing to put in the work, great things can happen. The story above with Jim and Tom is fairly simple, but a $5,000 wholesale fee is completely normal for good wholesalers.

And good wholesalers don’t do just one deal… they do a lot, and a lot of money can be made.

high sights

Finding Great Deals

A wholesaler without a good deal is like a butcher without any meat. It’s useless. Therefore, a wholesaler must become proficient and effective at building a pipeline of great real estate deals.

I say “pipeline” because your goal as a wholesaler is likely not to do just one deal and be done. Your goal is probably to do a lot of deals.

However, deals must be “massaged” into fruition and can take quite a bit of time.

Therefore, successful wholesalers consistently are filling up their pipeline with leads and working those leads through the pipeline. This pipeline consists of finding the leads, taking the phone call, building trust with the seller, doing due diligence, doing the math, preparing inspections or bids, and getting the deal signed at closing. At any given point, you might have 20 different deals in your pipeline in different phases of the deal, and it’s your job to consistently move them all forward toward profitability.

Let’s talk about how to get deals into this pipeline to begin with. First, understand that there are many ways to find good deals. I’ll outline just a few of the most common methods below, but creativity is key when finding good deals. Hopefully these methods below (and corresponding links) will give you a good place to start.

(For more on finding great real estate deals, check out my book How to Find Incredible Real Estate Deals — yours free when you buy The Book on Investing in Real Estate with No (and Low) Money Down – Ultimate Package.)

1.) The MLS

The MLS is the collection of all deals currently being sold by real estate agents. Although it can be difficult to find deals because of the competition, it is possible. Keep in mind, it can be difficult to wholesale a bank foreclosed home, but not impossible. The best part about wholesaling an MLS deal is the ability to still use a real estate agent to make it happen. For more on buying on the MLS, see “Five Tips to Get Great Deals On the MLS (Including Buying Houses on Friday…?).”

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

2.) Driving for Dollars

Driving for Dollars is the practice of getting in your car and driving around looking for potential deals. Typically, your goal is to look for properties that are “distressed.” This could be indicated by long grass, boarded up windows, tarps on the roof, legal notices on the windows, or anything else that makes the home appear to be someone’s problem. For more on Driving for Dollars, see “Driving for Dollars Bible: Finding Distressed Properties and Marketing.”

3.) Direct Mail

Direct Mail is the art and science of sending out targeted pieces of mail to potential motivated sellers. You can purchase lists of potential leads from companies like or for pennies per name and send the postcards, yellow letters, typed letters, and more. Your goal with direct mail is to get a certain percentage of people to call you and to get a certain percentage of those to sell you their home.

For example, you might send 1,000 pieces of mail, get 3.3% of those people to call you (30 phone calls) and get 3.3% of those to sell you their home, resulting in one sale. It might cost you $1,000 to send those letters, but if you can make $5k, $10k, or $20k on that investment, it might be a great use of funds. For a much more thorough post on Direct Mail marketing, see “The Ultimate Guide to Using Direct Mail Advertising to Grow Your Real Estate Business.”

4.) Other

There are a lot of other methods to find good deals that I don’t have time to cover. Things like Craigslist, billboards, online marketing, SEO, networking, co-wholesaling, and more. If you want to learn more about these, just search BiggerPockets, and you’ll likely find numerous articles on each topic.

At this point, you should be able to start finding deals. But wait… how do you know if it’s a good deal or not?

This is when Math comes in really handy. So lets talk about that.


Wholesaling Math

Yes, math is not everyone’s favorite subject, but the simple truth is this: Learn the math or don’t wholesale. There is no other way.

On a positive note, the math is not tough. In fact, once you figure it out, it’s fairly easy. Even better, there are online calculators that can help you tremendously in this area, and I’ll show you my favorite one in just a moment. But first, let’s cover the basics.

How Much Should You Offer?

Wholesalers find deals for other people. Therefore, it makes sense that the only way to find out what to pay is to start at the end and work backwards. After all, if you want to sell a property to a flipper, that flipper is going to need to make money or they won’t buy it from you in the first place.

The price you end up paying is known as the Maximum Allowable Offer (MAO). It’s the most amount of money you can afford to offer a seller and still make the kind of profit you want.

To come up with the MAO we need to start with the ARV, or After Repair Value. The ARV is the final price that the house flipper is going to sell the property for, someday.

From that number we need to subtract out all the costs associated with the deal. These costs are:

  • The Flipper’s Profit (how much the flipper wants to make on the flip)
  • Repair Costs (how much it costs to fix up)
  • Fixed Costs (how much the deal is going to cost the flipper, including holding costs and transaction costs on both sides of the deal)
  • The Wholesale Profit (how much the wholesaler wants to make)

For those who would rather see a formula, it looks like this:

MAO = [ARV] – [Flipper’s Profit] – [Repair Costs] – [Fixed Costs] – [Wholesale Fee]

Let’s use the example from the beginning of this post, with Jim, Tom, and Deborah.

Jim did his homework and knew that the After Repair Value of this property would be around $110,000. He knew that Tom always planned to make $20,000 as a profit on any flip. He also knew that the fixed costs on a flip would be about $15,000 (including the holding costs, the Realtor fees when Tom sold it, and the closing costs at the beginning and end). Next, Jim knew the home needed about $30,000 of labor and material to fix up. Finally, Jim knew he wanted to make $5,000 on the deal.


MAO = $110,000 – $20,000 – $30,000 – 15,000 – $5,000.

MAO = $40,000.

This is how Jim determined that $40,000 was the right price to pay.

But How Do I Learn All These Numbers?

Most people understand the math up until this point. However, the mistakes are made when a wholesaler dives deeper into the math. After all, how did Jim know that the fixed costs would be $15,000? How did he know the repairs would add up to $30,000?

If you are experienced, you can sit down and pencil out all these numbers. But if you are new to this and don’t plan on spending tens of thousands of dollars for personal coaching, I want to introduce you to the Wholesaling Calculator from BiggerPockets.

The Wholesaling Calculator allows you to go in and determine your Maximum Allowable Offer for your next potential wholesale deal. You’ll simply walk step by step through the questions and you’ll be able to make better, faster, more confident decisions.

Let me show you a quick video of how this calculator works. I’ll use the example from this post.

As you can see, all those confusing numbers become a lot more manageable when you walk through the process step by step. The Wholesaling Calculator can even help you determine the repair costs by walking step by step through the various components of the house that need to be repaired!

Another great thing about the Wholesaling Calculator: You can choose whether or not you are planning to sell to a house flipper or a landlord AND print out PDF reports specifically designed to sell your deal to those cash buyers. These reports were designed to show the cash buyer exactly what they need to see to make a decision — and make you look incredibly organized in the process. 

The wholesaling calculator was designed by investors, for investors, and contains all the information needed to make a great deal. As a free BiggerPockets user, you can go in and test the calculator three times. After that, you need to upgrade to a BiggerPockets Pro Membership in order to use it.

To upgrade to BiggerPockets Pro, click here or visit

Determining ARV

One thing the calculator can not do for you is to determine the ARV, which is the most important number in the entire math process. Every single number is subtracted from this figure, so it must be accurate to continue.

So how do you determine the ARV?

There are several methods but they generally revolve around one simple principle: Houses are worth about what local similar houses have recently sold for.

If a home sold 20 miles away, it’s likely not close enough. If a home sold with four bedrooms and your potential deal has 2 bedrooms, it’s likely not similar enough. If a home sold in terrible condition, it’s likely not similar enough because you are looking for the “after repair value” — in other words, the home in good condition.

Although it’s unlikely to find a recently sold home that is identical, to estimate the ARV you need to get as close as possible and make slight corrections. Two bathrooms versus one? Compensate for it in your numbers (an extra bathroom is sure to add some value, right?). If your property has 2,000 square feet and the recent sold one has 1,500, compensate for that (because more square footage should be worth more, right?).

An Easier Way to Find ARV

Perhaps the best way to find the ARV of a potential deal is to ask a local real estate agent. They have access to a tremendous amount of data of recently sold homes and can help you quite a bit until you get the hang of it. However, many agents will not want to do this work for you for free, so you’ll need to find a way to make it worth it for them. (Not that it’s a lot of work, but it does require a few minutes of their time.) 

I recommend building solid relationships with a few agents so you can give them your “unworkable leads,” and they can potentially make money by selling those leads. For example, if you can’t help a homeowner by wholesaling their home, perhaps the agent can sell it on the open real estate market instead.

This can be a true win-win relationship with an agent. 

business deal

Making Your Offer 

Once you’ve determined your MAO, it’s time to make that offer. This is when your skills at negotiating come in really handy.

I could tell you all about negotiating a deal with a seller, but it would pale in comparison to the information you’ll get from Michael Quarles on the 77th episode of the BiggerPockets Podcast.

If you want to take your wholesaling business seriously and want to do more deals this year, take an hour and listen to this. 

Related: 7 Intuitive Tech Tools to Streamline Your Wholesaling Business

After negotiating the deal and coming to terms on a price, it’s time to sign the contract. In some states you can pick up a standard state-approved purchase and sale document. In other states you can pick up one from a local Title company, buy one at Staples or OfficeMax, or purchase one online from a site like You might even find one in the BiggerPockets FilePlace.

There are several ways to actually close on the sale of the home, and the way you write your contract is going to depend on which way you plan on closing (assignment vs. double closing). 

In an assignment, you will simply write (in the spot where you write the buyer’s name) “and/or assigns” after your name. This means that you, and/or someone you assign the contract to, will buy the property. Assignments are typically not allowed when buying foreclosures, but most homeowners will not care. However, it’s important that you are upfront with the seller about your intentions. Next, you’ll need to sign an “assignment contract” with your cash buyer which officially assigns them the contract. 

For a double closing, you can simple sign the document in your name or business name. A double closing is the process of actually buying the property and then immediately reselling the property in the same day — within minutes of each other. If you don’t have the full 100% cash for the deal, there are numerous transactional lenders who can fund the deal for you for a 24 hour period — and a fee.

Now you have your contract. It’s time to get it sold!


Cash Buyers

Sure, you could take that good deal and go buy it for yourself. Maybe you’ll make a bunch of money if you flipped it. However, you are wholesaling this deal, not flipping it, so your goal is to get rid of the property as quick as possible so you can focus on finding other deals.

 So… who are you going to sell it to?

Likely, you’ve heard the term “cash buyer” before. It’s a bit of a buzzword that a lot of gurus like to toss around, but it is a real thing.

A cash buyer is a buyer who can pay cash for a house. Duh. However, it doesn’t necessarily mean it needs to be their cash; oftentimes a cash buyer can use private money or hard money to put the deal together. The point is: The cash buyer doesn’t need to go through a lengthy loan process that might be declined. They can purchase the property from you, guaranteed.

Cash buyers are typically house flippers, but they might also be local rental property investors as well. Everyone is looking for a good deal these days, and a lot of people have the cash to make it happen if you can find them the deal.

There is a lot of hype about finding cash buyers and building your cash buyer’s list. You can spend thousands of dollars for online programs designed to help you get thousands of cash buyers. However… let me save you some cash.

The truth is: Cash buyers are easy to find. If you’ve done everything else right, cash buyers are everywhere.

The best cash buyers are individuals who have bought similar properties for cash recently in the same area. But how do you find them?

You could put a free ad up on Craigslist or pay for an ad in the newspaper, but another great way is by asking a real estate agent to give you a list of all homes within a 20 mile radius that were “cash sales.” This data is easy and quick for them to get to you. Then, simply do some public record searching to see who bought those homes and send a letter or give them a call. 

Again, cash buyers are looking for deals. If you can show them that you are a serious wholesaler who will make them money, it’s the world’s easiest sell.

Don’t fall for the hype that you need to build a cash buyer’s list. This is just a distraction from your actual job: find a great deal.

Additionally, you don’t need hundreds of cash buyers. You don’t need dozens. You need a small handful, maybe just one.

Yep, I said it. Just one.

If you are just getting started wholesaling, one of the best strategies is to find one great cash buyer, have them tell you what they are looking for, and find them a deal.


Getting Paid

At this point you’ve done your homework, marketed for properties, got a property under contract, assigned it to the cash buyer, and… now what?

Related: The 5 Areas Where Newbies Trip and Fall in Wholesaling

It’s time to get paid?

This part of the process is actually pretty easy because there is not much for you to do. You simply need to get the title company all the information (the original purchase and sale agreement, the assignment contract, etc.) and sit back and let them do their magic. (If you are in a state that uses attorneys instead of Title Companies, then get it all to your closing attorney.)

The title company should take care of the rest if they know what they are doing. I’d recommend working with a title company familiar with wholesaling, as many are not. If you are unsure of what the best title company is to use, try asking some local wholesalers in your area or simply pick up the phone and start calling wholesalers.

In the end, the seller is going to get the money they were promised. The cash buyer is going to get a great deal. And you are going to be a little richer.

Now, what are you going to do with that money?

Buy a new car?

Get a new wardrobe?

Probably. BUT if you are wise, you will look at this money as an investment and will recycle it back into your marketing budget to keep your pipeline full. Doing one deal isn’t going to change your life, but creating a wholesaling pipeline that consistently brings in great deals will.

If you’ve enjoyed this guide, I hope you’ll do me the honor of sharing this on your Facebook wall. You never know whose life you just might change (and your family and friends might finally get it!).

Also, don’t forget to leave a comment below!

About Author

Brandon Turner

Brandon Turner (G+ | Twitter) spends a lot of time on Like... seriously... a lot. Oh, and he is also an active real estate investor, entrepreneur, traveler, third-person speaker, husband, and author of "The Book on Investing in Real Estate with No (and Low) Money Down", and "The Book on Rental Property Investing" which you should probably read if you want to do more deals.


  1. Wholesaling is very awesome when you think about getting a property under contract, and selling it off for a profit. The opportunties are endless when you think about all the properties out there just waiting for you to find them.

    Just note: No matter how good you are in negotiating deals you must be even more skilled at getting those leads. My recommendation is to master the marketing side of it, and just watch how your business will explode in a matter of months. So be consists, motivated and hungry then you will always stay ahead of the other local wholesalers.

    Awesome Content Brandon

  2. Don Clark

    Getting good leads are tough. 5 months at it and still trying to break through. Marrketing, marketing, marketing is key. Building endurance is the second key. You are going to hit obstacles, get frustrated and want to give up. Actually, I have gotten to the point where I am starting to love the chase. If you don’t love chasing the deal, you won’t last. It’s what you will spend most of your time on or paying someone else to do for you.

    Thanks Brandon for telling it how it really is. Some may have early success, but most will not.

    • Brandon Turner

      Hey Don, thanks for the message. Yeah, keep working it! And… even more than that, keep learning and growing to figure out how to do it better. I think that’s the key a lot of folks don’t do – always improve!

      Thanks for the great content and keep up the good work!

  3. Karen Russell

    Brandon, this is great info for us out of state (actually out of country) investors. Having done what you call a guru’s course, you’re right, they do tell you to start off with wholesaling and to build your buyers’ list. Trying to build the list from a distance, while still learning the process, is hard work, but I do love trying to find the deals. That’s where networking comes in and I’m trying to build up my relationships so I can make this whole real estate investing thing work – and Bigger Pockets is one of the best resources I’ve found so far!

  4. Let’s assume you (Newbie) decide to wholesale, and you find a deal (or what you think is a deal). You take this deal to a buyer. Let’s also assume this buyer isn’t dumber than a box of rocks.
    Buyer says, “Who are you? How long have you been doing this? (because we all know that things can go wrong.) And Buyer is a Buyer because he was smart enough to ask questions.
    You say, “This is my first deal.”
    So, how does that sound, down at the barber shop?
    I maintain you have to have some stories to tell before you can become a story teller. (My opinion.)

    • Robert Langley

      Wow Joseph, you’re sounding pretty negative. This is the second blog post where I’m asking myself, “what’s up, Man?” If you don’t mind me pointing that out. What is it?

      We ALL start somewhere in any career path we choose and someone’s willingness to start can make or sometimes break them. Either way, it is a natural course of life to fall when we start out with something.
      Babe Ruth had to pickup a bat before he could swing it. And strike out MANY times before hitting his first home run.

      For me, I’ve been an IT guy for the past 20 years and 10 of those years, after the first 5 of doing various different specialties (including some server support), consisted of just Desktop computer support for a central IT department for a local government. To the point that I felt stuck. I was then hired by the agency I was supporting and after a year, my boss came to me asking if there was any way we could host an application he was purchasing (instead of paying the higher monthly cost to host it with the central IT department).
      [by the way, the assistant CEO and my former boss said, “He’s not a SERVER guy”, because both my boss and his Director ended up having to meet with them]
      If I told my boss, “No, I don’t have enough recent server experience”, I wouldn’t be able to have helped them save well over $500k on server hosting costs YEARLY. Not to mention, the ability to do so much more.
      I now manage 40 virtual servers and nearly a Petabyte (petabyte = 1,000 Terabytes) of raw storage space.
      All this because I believe that God is the source of ALL Knowledge and Wisdom. And He directs me in the path I should go.
      I don’t have a college degree or certifications.
      I constantly hear from people who speak with management in the central IT department and they tell them how they can’t understand how I do it all.
      Much like Babe Ruth, I have my strike outs. But, they don’t define me. And I carry that mindset into my REI efforts.
      I’m on track to become an IT manager.

      I hope you can understand that this is not to boast about myself, but rather, how much possibility there is. I’m not anyone special. Whether a newbie or not, we all have the potential ability to do great things.

      Let’s move forward and find ways to lift each other up.
      We all have something in common. We’re human, no matter what are specialty is or our position in life.

      • Rebecca Napier


        I am also a newbie of the Real Estate Investing Market, there is so much information going so many directions it gets hard to comprehend. I was just browsing the information on Wholesaling and ran past your post! You are so correct in what you wrote, everyone is going to go thru hard times, just try try again as my grandmother always told me. No one is perfect in this world! Have a blessed day.

  5. Bob Ebaugh


    I’ve struggled with this idea of wholesaling. This is a great overview. But I still don’t quite understand.

    First, I’ve been one of those “cash buyers” you describe. Both for long term rentals and flips. A couple questions:

    1) What happens if the wholesaler is unable to find a buyer? I assume it goes back to the seller to sell.

    2) Why don’t traditional agents specialize in this? Seems like the sellers can end up spending more than the traditional commission, and still not sell their property. If I did the marketing, found sellers, and pitched this to them, what am I offering unless I can guarantee a sale at a specific price?

    I missed one deal from a wholesaler because I was too slow (day 3 on an email blast). That’s my fault, but it’s only one of 25 or so I’ve looked at and so far bought off the MLS.

    Thanks, Bob

    • Robert Langley

      Hi Bob,

      1) A good wholesaler would have some backup buyers and possibly a BIG (nation-wide) buyer who could come through regardless, as long as there is enough meat on the bone.
      I like focusing on the local buyer first, since that goes along with the relationship side of the business.
      But, yes, worst case scenario the wholesaler would execute a contingency clause.
      This stinks for reputation though and should be a last resort, since it can hurt a seller. -Much like an agent who might tell a seller they have a buyer, gets a contract for the sell and never finds a buyer. What a waste of time for the seller.- Oh, as well as the EMD being kept by the seller for the wholesaler failing at what they set out to do.

      2) That all depends on comfort level and the type of agent someone sets out to be.
      Most agents, I believe, are taught to get a house under contract and list it for sale. Or get it under contract and find a buyer (seems similar, right?). I think there are some agents who like to work with rehab pros. They just get their money as commission, rather than by double-close or assignment.
      Yeah, it is best not to pitch a quick sale, unless you are sure you can do it, like Michael Quarles who buys and retails (whole-tail). Actually, know your buyers and what they are looking for. It can make things go smoother.
      Personally, even though I’m a tech guy, I wouldn’t rely on email as a first contact about a property. Email can be horrible, unless someone is expecting it. I would try your phone a few times and if I couldn’t get you, I’d call my next buyer, no voicemail (except to say, “Hi, how are you doing?”.)
      Email and texting is not a good form of relationship building or moving these transactions. I would only email to send over the property info package, after I’ve reached you and you express consideration to purchase.


  6. Mykeesha Taylor

    Great article Brandon. I’ve been waiting on this one. You’re right about wholesaling. There are so many things that you have to know that the process can be overwhelming. I’m looking to start wholesaling for cash to fund MF rentals. I may be many months away from getting started. Thanks for breaking this topic down in a simple way. Looking forward to more great content.

  7. Assaf Furman

    If there’s one thing the wholesaler needs to be good at is finding motivated sellers. Once a seller is found it’s easier to partner up with more experienced investors, watch them calculate ARV, repair costs, negotiate, estimate potential rent etc.
    In a hot market where I am where the inventory is incredibly low, it’s all a matter of finding the person that will sell off-market.

  8. Thomas Guertin

    Great article but your math is wrong. You may want to correct it so you don’t confuse the people who are not strong with math. You mentioned in the article under math that the ARV is $110,000 but in your equation you wrote MAO=$120,000-20,000-30,000-15,000-5,000, MAO is $50,000. The first number should have been $110,000 which the MAO would be $40,000.


  9. walt doughty

    Any negatives to wholesaling far out weigh a regular job. it’s like the old saying A BAD DAY FISHING IS BETTER THAN A GOOD DAY AT WORK. !! I think alot of wholesalers think they are a wholesaler, when in reality they need to be a marketer. marketing is the name of the game. market for motvated seller leads, for cash buyers, put the two together and get paid.


  10. Silvestre M.

    “I wrote it, and there is an entire chapter dedicated to wholesaling. It’s like this post you are reading… on crack.” Haha! For those who have yet to read ‘The Book on Investing in Real Estate with No (and Low) Money Down’, that statement is very true. Lots of good content and it does a great job of breaking everything down. Good work Brandon!

  11. Damond Stewart

    Awesome article and thank you for taking the time to write and share this valuable information. I was left with one clarifying question: You mentioned knowing the profit your end buyer ideally wants to make. Is it safe to assume as you are finding cash buyers for your list you are simply asking each one what their desired profit is on every deal or minimum expected profit before they would consider it worth their time? In my head I assumed more profit the better so I never thought before reading this article that a number was needed. I hope I’m not complicating a simple thing. If there is a link already established that expounds on veting buyers for your list and questions that should be asked please share. Thanks Brandon and the readers of my post.

    • Baseem Gregg

      @Damond Stewart

      One thing I’ve noticed when talking to potential cash buyers at my local REIA is many buyers do have a profit number or ROI (Return on Investment) they operate their business on. Many times this number comes out in conversation without you necessarily asking for the number.

      Place yourself in the buyers shoes: If I know you’re a wholesaler why not give you my purchase criteria vs having you send me potential deals that do not fit what I’m looking for?

      Once you have a few (or even one) cash buyers criteria you can start looking for deals that’ll fit their needs. This not only allows you the ability to Feature/Benefit to your buyer(s) but hopefully it’ll get you to the closing table that much quicker.

      Happy Hunting!

  12. Andy Munoz

    Phenomenal article Brandon! I’ve done lots of reading about wholesaling and this article is by far one of the best ones. I am already starting to market on craigslist and very excited to start this journey. Thanks for the information.


  13. Baseem Gregg

    Terrific article full of direct, useful and true information! Loved the links and BP’s calculator is a great way to show potential buyers you’re a professional who knows his/her stuff. As stated early on, when it comes to Wholesaling you have to hustle and no different than any other venture you have to know your business and market!

    One nugget I’d tell anyone is: Monitor your efforts & marketing and always be willing to tweak the machine.

    Happy Hunting folks!

      • Michael Wheeler

        I second that, Xavier. I most definitely will snatch up that wholesale book as soon as it’s available!

        Brandon, I am a little confused though. I’m a total newbie (you could probably already tell) interested in breaking into real estate investing through wholesaling. I’ve been reading a lot of posts here on bigger pockets the past week or so, to try and educate myself, and I’ve come across several that state the first, and most important, thing a new wholesaler can do is build their buyer’s list. So, that’s what I’ve been trying to focus on…

        However, in your article you stated that if you’re just getting started the best strategy is to find one great cash buyer, have them tell me their criteria and then focus on doing my REAL job, which is finding them a great deal.

        Am I missing or confusing something or do you just have a different opinion than some of the other contributing writers/investors whose posts I’ve read? Any clarification you could give me on this would be greatly appreciated, because while I’ll definitely keep studying, I am chomping at the bit to take ACTION and do what’s needed to put money in the bank!

        But, great article man, pure gold for a new person like me.

      • LANEE’ on DECEMBER 13, 2015 12:40 PM

        Just Watched the Wholesaling-You Tube video with Brandon Turner
        Please~~~Help Me Out Here : )

        Scenario Example: Maximum Allowable Offer is $100,000 (for a buy and flip)
        Seller will accept $50,000
        You as the wholesaler will Assign and Sell Contract to Buyer For $55,000
        So Your Assignment Contract Says $55,000 and you will close transaction with Buyer for $55,000 Correct?
        As an Wholesaler you are letting the Buyer know after all is said and done that he or she can expect to
        spend $100,000 on this deal~~~~Is That Right?

  14. Nathan Hall

    “If you build it, they will come” (Field of Dreams, 1989). A few months ago, a good friend of mine, and part-time investor/landlord used this quote to drive a point home to me. We were talking about wholesaling, and I said that I need to have a buyers list in order to get started and make some money. He told me that investors are EVERYWHERE, in a dark secret society, looking for reasons to come out into the light. The irresistible deal draws them. He told me to put together deals that can’t be ignored, and I’d have cash buyers contacting me day and night. I’d put out some ads for buyers and written letters to Listsource buyer leads. I never got one response. Then I got my first deal under contract about a month ago. At first I figured the ARV too low, and I got no calls or responses of any kind from any of my property ads. I went back to the seller and renegotiated a lower price and then put the property back out there. Suddenly, my phone started going crazy. Just in the last week, I have had 6 investors come through and look at the place. I have had 2 other wholesalers offer to JV with me in the same time frame. I have three more appointments to show the place this week. I am fairly certain that a buyer will snatch this up before the end of this month, based on what I’ve been experiencing. I have now built a buyers list that I can use going forward. It all started building the irresistible deal though. Price to sell, and try to over calculate repair costs if you don’t know for sure. Take Care & God Bless!

    Fellow Newbie!

  15. Frederick Anderson

    Great article. I certainly wish I would have read this back in the beginning of the year when I started this journey. Information is straight forward and very beneficial. Thank you!

    One question however:

    I’m still working full time (hence, current goal to replace my 9 to 5 ASAP so I can focus and dedicate more time). Any advise for someone in my boat? How do I meet (or talk) with sellers, cash buyers, etc. if I’m in the office early AM and am out and in traffic early evenings?

    I’m thinking the answer is among the power team members. Is this where the Real Estate Agent comes into play? (I have a CPA and an Attorney already lined up. Just have to register my entity and find a deal while working the JOB).

  16. Sean Tamman

    Still nobody has answered this question, and it is the * * newbie question of all times * * when it comes to wholesaling….

    What happens to us (the wholesaler) when we cannot find a buyer for the property in our contracted time frame???

    In your example you said in the contract “we agreed to buy the property”…Well, now since you didn’t find a buyer, and your time is up…This mean’s ME (the wholesaler) is contractually bound to buy the property! Please correct me if I am wrong according to your article and answer how we as wholesalers get out of a situation like this…

      • Baron Hicklin

        Hi Richard,

        Thank you for answering that question. I am a newbie fresh out of the box, beginning to study wholesaling, and that was a BIG question for me. I am in this for the long haul. I believe if I can grab hold of wholesaling, it will open doors of knowledge that will be useful in other strategies. Thanks again.

  17. Daniel James

    Do any tenured wholesalers knock doors? If so, what is your experience like? Beneficial? I’m sure at some point you may have someone do this for you. I heard this strategy and I like it, but I want to hear if anyone has had success.

  18. Annabelle Dilworth on

    Why would any owner want to do business with any unlicensed (real estate) person who could not give the owner reliable comparable sale Informarion?…….I am having trouble finding anything of any substance in all of this — “wholesalers?” —— this seems to me to be a lot of “semantics” — & I’ve been licensed broker & in the actiual real estate business for years?……& I cannot really figure out anything of any actual substance that is really being discussed here — whoever suggested checking in with an attorney about it all is definitely on the right path….also learning some fundarmemtala about appraising & evaluating properties makes some sense — I’d keep my 9 to 5 jobs if I were you guys……..or just ger licensed & get in the normal real eatate business — all the people I ever knew who ever made money in so called “wholesale” deals had been in the actual real estate business foe years & had an awful lot of experience —

    • John Hamilton

      Who says we can’t get reliable comps? What if a wholesaler had an agent in their team to handle such tasks?

      I go back again to what I’ve experienced; brokers and realtors don’t understand investors, especially true for wholesaling.

      I think that most wholesalers would not be good wholesalers if they were agents. Too many restrictions and gotchas to “wholesale” as an agent. I know of 2 people who have a system and a broker behind them in order for them to be successful at it. According to them. Net listing is a big objection to the act of wholesaling. Not to mention conflict of interest.
      Apparently, there are plenty of people on BP that contradicts your last statement. No experience, or very little, no money, or very little, no credit, or very bad.
      One thing about real estate, you can get as creative as you can be and come out smelling like a rose.

    • Perfect epitomization of why real estate agents make absolutely lousy investors. Just keep on thinking that this is all made up hocus pocus make believe sweetheart. You keep making your $48,000/year for your 40-60 hour a week job (median realtor salary) and we will keep doing what we do. Idiot.

    • Don Montgomery

      Hey Annabelle,

      Just ready your post and found it unique but made perfect sense. I believe most Realtors look at investors as a business similar to their own. But in reality it is completely different in every way. I find it funny when I see a Realtor do a flip because they think it’s so easy. Then only to watch them lose a year salary because they didnt know what they are doing.

      Regarding your post you asked why would anyone not give the owner reliable comparable sales information? That is part to my point of the businesses being different. Your job is to give comparable information to list the house and then maybe it will sell or maybe not. My job is to get the best price that I can and then the house will definitely sell. I believe that home owners are tired of the traditional sale because it is mentally exhausting and the seller and the buyer usually walk away pissed after the transaction. There is always something wrong on the inspection that the seller has to fix. The buyers financing always has issues. The appraisal usually will come in short and the seller has to lower his price. Termite reports, survey, land encumbrances, etc. Its a pain and the sellers dont want to go through it.

      WIth me its sign and close in a couple of days and granted they need to sell 10%-20% less. They are willing to do it. Nothing against you but I have many people contact me at my website and want me to buy their house specifically so they dont have to deal with a Realtor.

      I have had my real estate license since 1996 and my mortgage brokers license since 2010. I have never used either one, I just like doing continued education every year. lol. I could never do what you do, it is not for me. The good thing about this business is you dont need a license to do it. This business definitely works but you have to be good. I went and looked a property that a guy purchased yesterday because another (experienced investor) told him too. He’s going to lose $25K-$30K easy. Being a Realtor and an investor are worlds apart and have nothing to do with one another

    • James Newport

      You and seller sign purchase and sale agreement. Then you and cash buyer sign a separate assignment agreement (be sure part of the assignment fee is non-refundable and goes to you if cash buyer backs out). Some title companies want the seller to sign the assignment agreement too, which is why you need to find a closing agent familiar with wholesaling in your area. Ask other wholesaler’s in your area who they use for a title company/closing attorney. Be sure your purchase and sale agreement has contingencies so you can get out of the contract if you can’t find a buyer and you don’t want to close on the property.


        Just Watched the Wholesaling-You Tube video with Brandon Turner
        Please~~~Help Me Out Here : )

        Scenario Example: Maximum Allowable Offer is $100,000 (for a buy and flip)
        Seller will accept $50,000
        You as the wholesaler will Assign and Sell Contract to Buyer For $55,000
        So Your Assignment Contract Says $55,000 and you will close transaction with Buyer for $55,000 Correct?
        As an Wholesaler you are letting the Buyer know after all is said and done that he or she can expect to
        spend $100,000 on this deal~~~~Is That Right?

  19. William Baumann

    Thank you so much for this insightful article. I’m new to this concept and look forward to reading every other article you mentioned in this! Thanks again and I look forward to grow and prosper with the help of the Better Pockets community!

  20. Dmitriy Pukhov

    Interesting read. From what I understand, you don’t want the buyer to know upfront you’ll be wholesaling his property, right? But then, how can you have an escape clause in your p&s agreement that gives you the right to back out if you don’t find a buyer for the property? What happens to your earnest money then?

    • John McGonigle

      You cannot back out just because you cannot find a Buyer. But your P&S contract should have an Inspection period. Generally the properties that are deals need repairs, often significant repairs. The contract should allow you to terminate the contract if unforeseen repairs are identified during the inspection period. During the inspection period you bring your partners/contractors/buyers through the property. If they find repairs that are beyond your original calculations, making it a bad deal, that is the real cause of not finding a Buyer. Those discovered higher repairs/costs are sufficient for exiting and getting Earnest Money returned, or often renegotiating the deal with the Seller. That is the purpose of the Inspection period.

    • Elizabeth Gilmore

      Dmitriy I think the only solution is to be honest with the seller and tell them of your intent. Let them know that typically you buy houses 3 different ways: buy and flip to another investor through an assignment of contract; buy and rehab and put it on the market; or buy it and rent it out. I presume that if you’re new, most of your deals will be wholesaling to an investor. But after enough flips, you may keep a property or two for yourself. Just be honest with your intent. I think with most motivated sellers, they don’t care who buys it at the end of the day, as long as it gets purchased and they get a check. Good luck!

  21. Eric Adamowsky

    Just curious, what happens if you get said property under contract with the intention to assign it and the deal falls through with your buyer? Is there a legitimate way out of the purchase agreement or a contingency clause to use?

  22. Brandon, I read a different article just before this one, 7 steps to succeeding in REI, and your first tip was read everything.

    I was a title lost as to what I should read, then I found the UBG to Wholesaling. I am getting the hang of the site.Yay!

  23. Mike Lamenta

    Very informative. Any working wholesales care to comment on the license issue. I’m in Ohio and the article specifically mentions Ohio as a state that someone got into trouble.
    Do you all agree that we should get licensed before we start?

  24. Juliet M.

    Thank you so much guys I am newbie based in South Africa, Johannesburg, I will be starting my wholesaling in June for now I am gathering as much info as I can, guys you are legend without your information I wouldn’t here today I mean right now.

    It sound scary sometimes but I am falling in love with the chasing process that you guys mentioned above, at least I understand its not easy but off course its possible.

    • Gaelle Gosselin

      Hi Juliet, Nice to hear about other Johannesburg people active on Bigger Pockets. I’ve been here a while mainly listening to the podcasts, and preparing my strategy. Have already got a 16 unit property but looking for more. What part of JHB are you in ? looking to meet up with other investors to share info. I haven’t figured out how wholesaling works in SA yet ! Good luck, see you around.

  25. venita brown

    The information here is very good with food for thought. I am new to the wholesaling idea of real estate investing. The one thing that has stood out to me is to not get caught up being accused of doing something illegal so i would consider doing the double closing with a transactional lender. It will cut my profit in the beginning til i can stand on my own, but i’ll get some good experience with wholesaling and financing. I would also like to read more info involving options contracts to purchase real estate. Are there any articles about this form of real estate investing ?

  26. Everlena Jackson

    Thank you so much for taking the time to share a starting point for us newbies it is well written and a easy read and I’m following your advice and reading the other links within this article to get the whole picture. And since I’m a Realtor I’m also compiling a buyers list of all the cash buyers in my area which is a easy task for me and I actually began before I read the article but now it has truly motivated me to get moving! Thanks and continued success and biggerpockets is the best site that I have come across and filled with a ton of great information and people willing to assist. #noexcuses

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