What wholesaling real estate actually is
Wholesaling real estate is putting a distressed or off-market house under contract at a discount, then assigning that purchase contract to a cash buyer for a fee. You never take title, you never need a mortgage, and in most states you never need a license — you are selling your *equitable interest* in a contract, not the house.
The whole business is four moving parts:
- A lead — a motivated seller with a property worth less to them than the cash and speed you can offer.
- A number — an ARV (after-repair value), a rehab range, and a maximum allowable offer (MAO) you can defend.
- A contract — a purchase agreement with an assignment clause and an inspection period.
- A buyer — a cash buyer, flipper, or landlord who closes and pays your assignment fee.
Step 1: Pick a buy box, not a city
New wholesalers pick "Memphis." Experienced ones pick "3/2, 900–1,600 sq ft, built after 1955, ARV $130k–$220k, needs cosmetic-to-moderate work, absentee or pre-foreclosure owner." A buy box is what makes lead lists small enough to actually call and clean enough to actually close.
Write your buy box in one plain sentence. In Offr AI you paste that sentence and get back 25+ matching distressed properties with the owner's phone number attached.
Step 2: Find off-market and distressed properties
The lead types that convert, roughly in order:
- Pre-foreclosure / lis pendens — a public filing, a hard deadline, and real motivation.
- Code violations — the city is already fining the owner to fix something they can't afford.
- Vacants — USPS vacancy flags, overgrown lots, utility shutoffs.
- Probate and inherited property — out-of-state heirs who want cash, not a rehab.
- Tired landlords / absentee owners — county tax mailing address different from the property address.
- Tax delinquent — two or more years behind on the county tax roll.
- Stale MLS / expired / FSBO with "as-is", "handyman", "TLC", "investor special" in the remarks.
All of this lives in county records, court dockets and the assessor roll. See our guide to searching county property records for exactly where to pull each one.
Step 3: Skip trace the owner
A lead without a phone number is a postcard, not a deal. Skip tracing takes the *legal owner* from the assessor record and returns their phones, emails and relatives. Cross-referencing the assessor name (not the occupant name) is what separates a 20% contact rate from a 60% one. See skip tracing for real estate.
Step 4: Run the numbers before you call
The classic formula:
MAO = (ARV × 0.70) − Repairs − Your Fee
The 70% rule is a starting point for on-market, retail-competitive deals. On a truly off-market property with no competing offers, 75–80% of ARV minus repairs is often still a great deal for your buyer — do not lose contracts to a rule of thumb. Our fix and flip calculator runs ARV, MAO, profit and ROI in one screen.
Rehab ranges that hold up in most markets:
| Condition | Cost per sq ft |
|---|---|
| Cosmetic (paint, carpet, fixtures) | $15–$25 |
| Moderate (kitchen, baths, flooring, HVAC) | $30–$45 |
| Heavy (roof, systems, structural, additions) | $50–$85 |
Step 5: Call the seller
You are not selling. You are diagnosing. The four questions that matter:
- What's going on with the property?
- What condition is it in — roof, HVAC, kitchen, baths?
- If you sold it, what would you do next?
- What number would make this easy for you?
Then shut up. The first person to talk after the number loses.
Step 6: Lock it up
Use a purchase agreement with (a) an assignment clause ("Buyer: [Your Name] and/or assigns"), (b) an inspection/due-diligence period of 7–14 days, and (c) a small earnest money deposit. Disclose in writing that you may assign the contract and that you are acting as a principal, not an agent. That single disclosure sentence is what keeps you on the right side of most state wholesaling statutes.
Step 7: Assign and get paid
Send your buyers list a one-page deal sheet: address, beds/baths, sq ft, ARV with three comps, repair estimate, your price, and access instructions. Sign an assignment agreement, send it to title, and your fee is wired at closing. Typical assignment fees run $5,000–$15,000; a well-bought distressed property in a strong market can pay $25,000+.
How long does a first deal take?
Realistically 30–90 days of consistent effort: roughly 100 conversations, 10 offers, 1 contract. The people who quit at day 21 quit right before the math starts working.