What is Real Estate Wholesaling?
Wholesaling is a real estate investment strategy where you find a property at a below-market price, put it under contract with the seller, then sell (assign) that contract to an end buyer for a profit called an assignment fee. You never own the property, never renovate it, and never manage tenants. You are the middleman who connects motivated sellers with cash buyers.
How wholesaling works
The process follows six steps: (1) find a motivated seller with a property priced below market value, (2) analyze the deal to verify the numbers work, (3) sign a purchase contract with the seller that includes an assignment clause, (4) find a cash buyer willing to purchase at your contract price plus your fee, (5) sign an assignment agreement transferring your contract to the buyer, and (6) collect your assignment fee at closing.
The entire process typically takes 2 to 6 weeks from initial contact with the seller to closing. Your financial risk is limited to your earnest money deposit (typically $100 to $500 on wholesale deals), which is refundable during the option or inspection period.
Typical wholesale profits
Assignment fees range from $5,000 to $15,000 for mid-market deals, with $8,000 to $12,000 being the national average. Experienced wholesalers closing 2 to 4 deals per month generate $16,000 to $48,000 in monthly gross revenue. Costs include marketing ($2,000 to $5,000/month), skip tracing, tools, and potentially virtual assistants.
Who wholesaling is for
Wholesaling requires minimal capital (under $1,000 to start) and no real estate license in most states. It is best suited for people who are comfortable with sales, negotiation, consistent marketing, and managing multiple deals simultaneously. It is active income, not passive. See our complete wholesaling guide for the full breakdown.
Legal considerations
Wholesaling is legal in all 50 states, but some states require specific disclosures to the seller about the intent to assign. Always have a signed contract before marketing, market your contract (not the property), and consult a real estate attorney. See our wholesaling legal guide for state-specific rules.