Wholesaling
Contracting a property and assigning the purchase contract to another buyer for a fee.
Definition
Wholesaling involves finding a motivated seller, getting a property under contract at a discount, and then assigning that contract to an end buyer (usually a flipper or buy-and-hold investor) for a fee. The wholesaler never actually purchases or owns the property. Assignment fees typically range from $5,000 to $20,000 or more. Wholesaling requires minimal capital since you're not buying the property, but it demands strong marketing skills to find deals and a reliable buyers list. Some states have specific licensing requirements for wholesaling, so investors should understand their local laws before pursuing this strategy.
Related Terms
Fix and Flip
Buying a property below market value, renovating it, and selling it for a profit.
After Repair Value (ARV)
The estimated market value of a property after planned renovations and improvements are completed.
Creative Financing
Non-traditional methods of financing a real estate purchase, such as seller financing or subject-to deals.
Due Diligence
The investigation and analysis an investor conducts before purchasing a property to verify all material facts.
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