Before we describe how to wholesale real estate, we should briefly discuss what it means. What does Wholesale or wholesaling means in real estate terms? Is it similar to wholesaling in other business commerce terms? The answer is sorta, for the most part wholesaling real estate is similar to wholesaling other goods. Wholesaling is the process of assuming ownership of a property or buying it and quickly selling it to another investor. The term “wholesale” comes from the fact, that as the wholesaler you are between the initial provider aka the seller and the end buyer of the house (investor).
How do you go about wholesaling a home? We are going to give an overview of how to wholesale real estate. Before any thoughts of wholesaling you must first have a property under contract. There are 3 main steps to wholesale real estate.
Wholesaling is a viable option of building capital quickly. The return on in investment is attractive because you do not have to put as much capital as you would in a rehab. If you use an assignment of contract you have no closing costs because you never truly own the property. Wholesaling using a double close has its own benefit. You do not have to disclose how much profit you are making on a deal to the seller.
The Wholesaling process requires capital that beginner investors may not have readily available. Double closing requires that you purchase the property from the seller with your own funds. A double closing strategy also means you pay closing costs twice; once when you purchase it from the seller and again when you sell the property.
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