Real estate wholesaling means putting a property under contract with a motivated seller, then assigning that contract (or double closing) to a cash buyer for a fee. The steps are: find motivated sellers, run the numbers (usually ARV × 70% − repairs − your fee), sign a purchase agreement with clear disclosure, find a buyer, and close through a title company or attorney. Rules vary by state, and many states now require written disclosure or registration.
What wholesaling is
A wholesaler is a deal finder. You locate a homeowner who wants to sell quickly, often as-is, and agree on a price. You don't buy the house for yourself. Instead you sell your right to buy it (the contract) to an investor who will rehab, rent or resell it. Your profit is the difference, usually called an assignment fee.
Everyone can win when it's done honestly: the seller gets speed and certainty, the investor gets a deal they didn't have to find, and you get paid for finding it.
The wholesale deal in 7 steps
- Find a motivated seller.
- Estimate the after-repair value (ARV) and repairs, and calculate your maximum offer.
- Make an offer and sign a purchase agreement that allows assignment.
- Give the seller any written disclosures your state requires.
- Market the contract to cash buyers (within what your state allows).
- Assign the contract or arrange a double close.
- Close through a title company or closing attorney and collect your fee.
Step 1: Find motivated sellers
Motivation is the whole business. A seller who needs to move fast, has a house that needs work, or is dealing with a life event will trade some price for speed and certainty. Common lead sources:
- Direct mail and cold calling to lists like absentee owners, high equity, tax delinquent, pre-foreclosure, probate and code violations.
- Texting and SMS campaigns (follow TCPA and carrier rules closely).
- Driving for dollars: logging vacant or distressed homes in your target area.
- PPC and SEO on "sell my house fast" style searches.
- Your website with an instant offer: sellers searching for a cash buyer want a number first. Giving them a preliminary offer in exchange for their details converts curious visitors into leads and filters out sellers whose price will never work.
- Agents, attorneys and other wholesalers: referrals for properties that won't sell on the market.
Most lead sources produce a lot of conversations with people who aren't actually going to sell at a workable price. Learn to qualify motivated seller leads fast, or your time disappears into calls that go nowhere.
Step 2: Run the numbers
The number that matters most is your maximum allowable offer (MAO), the most you can pay the seller and still leave room for your buyer's profit and your fee. The common rule of thumb:
Example: a home worth $250,000 fully renovated, needing $40,000 of work, with a $10,000 fee target. $250,000 × 0.70 = $175,000. Minus $40,000 repairs = $135,000. Minus $10,000 = $125,000 MAO.
The 70% is a rule of thumb, not a law. Buyers in expensive or competitive markets may pay 75–80% of ARV; in slower or riskier areas, 65% or less. Ask your buyers what they actually pay. Try different numbers with our free MAO calculator.
Estimating ARV and repairs
ARV comes from recent sold comparables: similar homes, nearby, sold in the last three to six months, in renovated condition. Repairs are where beginners get burned. Walk the property, price the big items (roof, HVAC, foundation, electrical, plumbing) separately, and add a cushion.
Steps 3–4: Contract and disclosure
Use a purchase agreement reviewed by a local attorney. It should name the buyer as you "and/or assigns" (or otherwise allow assignment), include an inspection period, and set a realistic closing date. Keep earnest money modest but real.
Be upfront with the seller about what you're doing. A growing number of states require written disclosure that you're a wholesaler, that you hold only an equitable interest, and that you may assign the contract for a profit. Sellers who understand the deal close; sellers who feel misled cancel and complain.
Step 5: Find cash buyers
Build your buyers list before you need it. Sources include recent cash purchases in county records, local investor meetups, property managers, landlords, flippers you see pulling permits, and other wholesalers. Ask each buyer what they buy (areas, price range, condition, rehab size) and what they pay relative to ARV. That answer sets your MAO.
Check your state's rules before advertising a property you don't own. Some states treat publicly marketing the property itself as brokerage that requires a license.
Steps 6–7: Assign or double close
Assignment: you sign an assignment agreement with your buyer, they take over your contract, and your fee is paid at closing. Simple and cheap, but your fee is visible to everyone.
Double close: you buy the property and resell it, often the same day, using two sets of closing documents (and sometimes transactional funding). It costs more but keeps the two sides separate. Some states now treat a simultaneous double close the same as an assignment for disclosure purposes.
Use a title company or closing attorney that is comfortable with wholesale transactions.
Is wholesaling legal? The 2026 rules
Wholesaling is legal in every state, but how you do it is increasingly regulated. Since 2022, more than a dozen states have passed wholesaling-specific laws. They mostly require disclosure and, in some states, registration or a license rather than banning wholesaling outright. Recent examples:
- Ohio (effective March 2, 2026): wholesalers must give sellers a separate, clearly printed written disclosure; if it's missing, the seller can cancel before closing.
- Connecticut (effective July 1, 2026): wholesalers must register with the Department of Consumer Protection, sellers get three business days to cancel, and closings are capped at 90 days unless extended in writing.
- Oregon, North Dakota, Oklahoma, Texas, South Carolina, Wisconsin, Nebraska and others have their own disclosure, registration or licensing rules.
The direction is consistent: tell the seller in writing what you are, don't market a property you don't own as if you do, and close on time. Check your state's current law with a local real estate attorney before your first contract.
Beginner mistakes that cost deals
- Underestimating repairs. Your buyer will re-run the numbers, and a deal priced on light repairs falls apart.
- Chasing unmotivated sellers. A seller who wants retail price isn't a wholesale lead, no matter how nice the call went.
- No buyers list. A contract with no buyer is a liability with a deadline.
- Contracting too high to "lock it up." Then renegotiating at the last minute. It burns sellers and your reputation.
- Skipping disclosure. In more states every year, that makes the contract cancellable and you liable.
Let your offer do the first call
Brisk is an instant-offer widget for wholesalers and investors. Sellers enter an address, pick the condition and name their lowest price, then see a preliminary offer from your formula. Leads that fit your numbers are tagged Qualified and sent to your CRM. Plans start at $49 a month.
Frequently asked questions
How does real estate wholesaling work?
A wholesaler puts a property under contract with a motivated seller, then assigns that contract or double closes to a cash buyer for a higher price. The difference, usually called the assignment fee, is the wholesaler's profit. The wholesaler doesn't renovate or keep the property.
How much money do you need to start wholesaling?
Wholesaling needs less capital than buying, but it isn't free. Expect to pay for marketing to find sellers, earnest money deposits, a local attorney to review your contracts, and any state registration or licensing fees. Marketing is usually the largest cost.
What is the 70% rule in wholesaling?
The 70% rule says an investor should pay no more than 70% of a property's after-repair value (ARV), minus repair costs. Wholesalers subtract their assignment fee too: MAO = ARV × 70% − repairs − fee. The right percentage depends on your market and your buyers.
Is wholesaling real estate legal?
Yes, in every state, but many states now regulate it. Ohio, Connecticut, Oregon, Oklahoma, Texas and others require written disclosure, registration or a license in some situations. Rules change often, so check your state's current law with a local attorney.
How do wholesalers find motivated sellers?
Through direct mail, cold calling, texting, driving for dollars, online ads and SEO, referrals, and seller-facing tools like instant offer widgets that give homeowners a preliminary cash number in exchange for their details and lowest price.
What is a good assignment fee?
It depends on the deal and market. Fees of $5,000 to $20,000 are common on single-family deals, and larger on bigger spreads. The fee has to leave your buyer a real profit, or they won't close.
Keep reading
General information, not legal, tax or financial advice. Check the rules in your state and talk to a local real estate attorney before you sign contracts.