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  • Writer's pictureRyan Jones

Unveiling the Secrets of Real Estate Wholesaling: A Lucrative Investment Strategy

Real estate investment offers numerous avenues for building wealth, and one strategy that has gained significant popularity in recent years is wholesale assignments. This unique approach allows investors to profit from real estate transactions without actually purchasing the property themselves. In this blog post, we will delve into the intricacies of wholesale assignments in real estate, answering key questions and shedding light on its viability as an investment strategy.

What Does a Wholesale Investment Strategy Mean in Real Estate?

Wholesale real estate, often referred to as wholesaling, is a real estate investment strategy where investors act as intermediaries between motivated sellers and potential buyers. Instead of buying a property, wholesalers secure contracts to purchase properties at a lower price than the market value and then sell or "assign" these contracts to other investors or buyers for a profit.

Is Wholesale Real Estate Worth It?

Wholesaling can be a lucrative venture for those who are dedicated and well-versed in the real estate market. However, it's not without its challenges. Success in wholesaling often depends on a wholesaler's ability to find motivated sellers, negotiate favorable deals, and build a network of investors or buyers willing to purchase the contracts they've secured. It's worth it for those who can navigate these hurdles effectively.

Can You Really Make Money Wholesaling Real Estate?

Yes, you can make money wholesaling real estate. Wholesalers earn money through assignment fees, which are typically a percentage of the property's purchase price. Successful wholesalers can earn substantial profits by consistently finding and assigning lucrative deals.

What is the Difference Between a Wholesaler and a Real Estate Agent?

While both wholesalers and real estate agents facilitate property transactions, there are fundamental differences between the two roles. Real estate agents work on behalf of property sellers or buyers to help them buy or sell properties and earn commissions on the sale. Wholesalers, on the other hand, do not represent buyers or sellers but instead facilitate transactions between them and profit from the assignment of contracts.

What is an Assignment in Wholesaling?

An assignment in wholesaling is a legal and contractual process where a wholesaler transfers their right to purchase a property to another party, typically an investor or buyer, in exchange for an assignment fee. This fee represents the wholesaler's profit from the transaction.

What is the Difference Between Assignment and Wholesale?

Wholesale refers to the overall process of acquiring properties at a discounted price and selling them to other investors or buyers for a profit. Assignment, on the other hand, is the specific act of transferring the rights to purchase a property to another party, along with the associated contract, in exchange for a fee.

What Does Wholesale Deal Mean in Real Estate?

A wholesale deal in real estate refers to a transaction in which a wholesaler secures a property under contract at a price significantly below its market value and then assigns that contract to another party for a profit.

What is the Average Assignment Fee for a Wholesaler?

The average assignment fee for a wholesaler can vary widely depending on the location, property type, and the overall deal's profitability. Assignment fees can range from a few thousand dollars to tens of thousands of dollars. Successful wholesalers often earn fees equivalent to a percentage of the property's purchase price, typically ranging from 3% to 10%.

What are the Cons of Real Estate Wholesaling?

While real estate wholesaling offers the potential for substantial profits, it also comes with its share of challenges and drawbacks. Some cons of wholesaling include:

  1. Market Volatility: Wholesaling can be affected by market fluctuations and economic conditions.

  2. High Competition: The competition among wholesalers can be fierce, making it challenging to find and secure profitable deals.

  3. Legal and Ethical Concerns: Wholesalers must navigate complex legal and ethical issues, such as ensuring they have a valid contract and disclosing their role in the transaction.

  4. Unpredictability: Wholesaling income can be unpredictable since it relies on finding and closing deals.

Why Would a Seller Sell to a Wholesaler?

Sellers may choose to sell their property to a wholesaler for various reasons, including:

  1. Speed: Wholesalers can often close deals quickly, providing sellers with a faster exit from their property.

  2. Convenience: Some sellers prefer a hassle-free transaction without the need for repairs, inspections, or marketing.

  3. Motivated Sellers: Wholesalers often target motivated sellers who need to sell quickly due to financial distress, foreclosure, or other urgent circumstances.

Can a Seller Cancel a Wholesale Contract?

The ability of a seller to cancel a wholesale contract depends on the terms and conditions outlined in the contract itself. Sellers should consult with legal counsel to understand their rights and obligations and the potential consequences of canceling a contract.

Example of a Wholesale Deal

Let's illustrate a wholesale deal with an example:

  1. A wholesaler identifies a distressed property worth $100,000 on the market.

  2. The wholesaler negotiates with the motivated seller and secures a contract to purchase the property for $70,000.

  3. The wholesaler then assigns the contract to an investor for a fee of $10,000.

  4. The investor purchases the property for $70,000 and plans to renovate and sell it for its market value of $100,000, potentially making a profit after expenses.


Real estate wholesaling, with its potential for substantial profits, can be a viable investment strategy for those who are willing to put in the effort and develop the necessary skills. However, it's essential to be aware of the challenges and legal considerations involved in wholesaling. As with any real estate investment strategy, success often comes to those who approach it with diligence, market knowledge, and a strong network of investors and buyers.

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