Wholesaling real estate is the practice of putting a distressed house under contract at a discount, then assigning that contract to a cash buyer for a fee. You never own the house. You never need a mortgage. What you're actually selling is the contract, and the fee you collect for it is called an assignment fee.
Here's the entire process, in the order you'll actually do it.
1. Define a buy box before you look at a single house
A buy box is the written description of the deal you will buy. Without it, you waste weeks chasing houses no investor wants. A usable buy box names:
- Market — 2–3 counties you can drive or virtually service
- Price range — usually $60k–$250k for entry-level wholesaling
- Property type — single family, 2–4 unit, or both
- Condition — needs cosmetic work, needs full gut, or either
- Exit — flip buyer, landlord/BRRRR buyer, or Section 8 buyer
Write it as one sentence: *"3/1 and 3/2 single family in Shelby County TN, $60k–$140k, needs work, owner-occupied or absentee, sold to landlords."*
2. Pull distressed leads, not listings
Retail listings are already priced at market. You want owners with a reason to discount:
- Pre-foreclosure (lis pendens / notice of default filed, no auction date reached)
- Tax delinquent 2+ years
- Code violations and condemnations
- Vacant / utility shutoff
- Probate and estate transfers
- Absentee owners with 60%+ equity
- Expired and withdrawn listings
- On-market listings with "as-is", "cash only", "handyman", "TLC", or 60+ days on market
Most beginners fail here because they use one source. Stack five and your call list is never empty.
3. Get the owner's actual phone number
A lead without a phone number is a bookmark. Skip tracing takes the property address, resolves the legal owner from assessor records, then matches that person to phones, emails, and relatives. Cross-reference two providers and prioritize numbers where the surname matches the deed.
4. Call, don't mail (at first)
Direct mail costs money and takes 45 days. Calling costs time and takes today. Your first call is not a pitch — it's four questions:
- "Would you consider an offer on the house at [address]?"
- "What kind of work does it need?"
- "If we could close on your timeline and you didn't have to fix anything, what would you need to walk away with?"
- "Is there anyone else on the deed?"
Say the price number last. The seller's number tells you if a deal exists.
5. Run the numbers
The wholesaler's formula:
MAO = (ARV × 0.70) − Repairs − Your Fee
ARV is what the house sells for fully renovated, based on sold comps within a mile in the last 6 months. Repairs is your rehab estimate. Your fee is the assignment fee, usually $5,000–$15,000 on entry-level deals.
If ARV is $200,000, repairs are $40,000 and you want $10,000: MAO = 140,000 − 40,000 − 10,000 = $90,000. That's your ceiling, not your opening offer.
6. Get it under contract
Use a state-appropriate purchase agreement with three things: an inspection/due-diligence period (7–14 days), an assignment clause ("Buyer and/or assigns"), and a small earnest money deposit ($10–$500). The inspection period is your exit if you can't find a buyer.
7. Assign it to a cash buyer
Send the deal to your buyers list with photos, the ARV with comps attached, your repair estimate, the contract price, and your fee stated plainly. Investors don't mind you making money — they mind being lied to about ARV.
8. Close and get paid
The title company closes the transaction, the end buyer funds, and your assignment fee is wired from the closing table. Most first-time wholesalers see their fee 14–30 days after the contract is signed.
The honest part
Your first deal will take somewhere between 200 and 800 conversations. Not doors, not mailers — conversations. Everything else in this guide is optimization around that single number.