“When one door closes, buy another one and open it yourself.” – Anonymous
If you’re new to real estate and wondering how to get started with little or no money, wholesaling might be the perfect entry point. But how exactly does wholesaling real estate work? More importantly—how do you actually make money doing it?
In this in-depth guide, I’ll walk you through the entire process of structuring your first wholesale deal—from finding motivated sellers to closing with a buyer—so you don’t have to spend hours piecing it together from YouTube videos or scattered blog posts.
🏠 What Is Real Estate Wholesaling?
Wholesaling real estate is a short-term investment strategy where you get a property under contract at a below-market price, then sell that contract to another buyer for a profit—without ever owning the home.
It’s also known as:
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Flipping Paper
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Assignments of Contract
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Contract Flipping
The key is finding distressed or undervalued properties, negotiating a purchase price with the seller, and assigning that contract to an end buyer—usually a real estate investor.
💵 How Do Wholesalers Make Money?
Here’s how it works in simple terms:
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Find a deeply discounted property.
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Get it under contract at a low price.
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Find a cash buyer willing to pay more.
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Assign the contract to the buyer.
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Collect the difference (called the assignment fee).
🧾 Example:
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Seller agrees to sell their property for $90,000
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You find a buyer willing to pay $100,000
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You assign the contract to that buyer and collect $10,000 at closing
🔁 Two Ways to Wholesale a Deal
1. Assignment of Contract
This is the most common and beginner-friendly method. You simply assign the contract to a buyer for a fee and step out of the transaction.
2. Double Closing (Transactional Funding)
You buy the property temporarily using your own money (or transactional funding), then resell it—often on the same day—to the end buyer. This method is preferred when:
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You want to keep your profit confidential
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The seller or buyer won’t accept an assignment
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You need to show a “clean” chain of title
🧠 Real Estate Wholesaling in 5 Stages
🔎 Stage 1: Get a Property Under Contract
Use this quick formula to estimate your offer price:
ARV x 70% – Repairs – Desired Profit = Max Offer
Example:
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ARV (After Repair Value): $225,000
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Repairs: $50,000
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Assignment Fee: $10,000
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Max Offer = $225,000 x 0.70 – $50,000 – $10,000 = $97,500
👥 Stage 2: Find a Cash Buyer
Network with investors, attend REIA meetings, use skip tracing tools, or list the deal on Facebook Marketplace, Craigslist, and investment forums.
✍️ Stage 3: Assign the Contract
Have the buyer sign an Assignment Agreement and send an Earnest Money Deposit (EMD) to the title company. This locks in their intent to buy.
🔒 Stage 4: Close the Deal
The title company or closing attorney will handle the paperwork. Once the deal closes, you’ll receive your assignment fee.
🔍 Step-by-Step Breakdown of the Wholesale Process
Step 1: Find Motivated Sellers
Look for people who need to sell fast, such as:
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Driving for Dollars (distressed homes, boarded-up windows, uncut grass)
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Attorneys (probate, divorce, bankruptcy)
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City Inspectors (code violations, liens)
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Direct Mail (target absentee owners, pre-foreclosures, probate leads)
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FSBO Sites & Craigslist (look for stale listings)
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MLS Expired Listings (work with a licensed agent)
Want to supercharge your lead generation? Use PropStream to pull targeted seller data.
Step 2: Be Honest and Transparent With Sellers
Tell the seller:
“We work with a network of investors. If we find a buyer willing to pay our asking price, they will be the ones purchasing your property. You’ll receive the full amount in this agreement at closing.”
You don’t have to say you’re a “wholesaler,” but being upfront builds trust and reduces future friction.
📌 Pro Tip: Make sure your purchase contract includes an assignment clause.
Sample clause:
“Buyer may assign this agreement without Seller’s prior written consent.”
Step 3: Do Your Due Diligence
Act like you’re buying the property yourself. Check:
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Condition of the property
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Rehab costs
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Market comps
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Liens or violations
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Legal ownership and property lines
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Access to utilities and roads
Use tools like PropStream, Canva (for marketing packets), and county GIS maps.
Step 4: Lock In the Buyer
Once you find a serious buyer:
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Have them sign the Assignment Agreement
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Collect the Earnest Money Deposit
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Send both to your title company or attorney
🗣 Sample email to buyer:
“Please send back the signed Assignment Agreement and a $___ EMD by 5 PM today. Once received, we’ll begin the closing process through [Title Company].”
Step 5: Close and Get Paid
The title company needs:
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Purchase Agreement
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Assignment Agreement
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EMD confirmation
They’ll handle the closing, pay the seller, and wire your assignment fee. 🤑
⚠️ Common Pitfalls & Drawbacks of Wholesaling
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Short contract timelines mean you need to act fast
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No property improvements allowed
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No seller financing unless you double close
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Cash-only buyers (no traditional loans on assigned contracts)
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Inexperienced title companies can delay or ruin deals
Find investor-friendly closing agents by asking your REIA or cash buyers for recommendations.
🎓 The Learning Never Stops
I’ll be honest—I’m still learning too. Wholesaling is a fantastic way to break into real estate, but it’s not always easy.
Start with assignments. Learn the ropes. Then consider double closings and other strategies. Just remember:
Your network is your net worth. Keep learning, keep networking, and don’t overthink it.