🔄 What is Wholesale in Real Estate Investing?

Wholesaling in real estate is a short-term investment strategy where an investor (the wholesaler) contracts a property with a seller and then assigns that contract to an end buyer—usually a fix-and-flip investor—for a profit margin or “assignment fee.”

📌 When and Why It’s Used in Real Estate

Wholesaling is often used by new or capital-light investors who want to generate quick cash without owning property. It’s popular in hot markets where discounted properties can be acquired and reassigned quickly.

It’s especially useful for building networks and capital with low upfront investment and no need for renovation or property management.

🧮 How It’s Calculated or Applied

Wholesalers make money through an assignment fee, which is the difference between the price agreed with the seller and the price agreed with the end buyer.

Assignment Fee = End Buyer Contract Price – Original Seller Contract Price

✅ Pros

• Requires little to no capital to get started
  
• No property ownership or maintenance
  
• Quick turnaround and fast profit potential
  
• Great for networking with buyers and sellers
  

⚠️ Cons

• Success depends on finding motivated sellers and cash buyers
  
• Legal complexities and contract limitations in some states
  
• May require a real estate license depending on local laws
  
• High competition in popular markets