Wholesaling for Beginners #1



Wholesaling! The big new (sort of new) real estate investing strategy. Wholesaling has, in fact, been around forever. Investors and non-investors have been able to assign contracts as long as there have been contracts. Many states (including Utah) have standardized forms to assign the contract. But it’s been more recently, in the last 4-5 years that wholesaling has become its own cottage industry within real estate investing.

Wholesaling is the strategy of finding a great deal and locking it up by putting it under contract. The wholesaler is the buyer and the property owner is the seller on that agreement. But then, instead of the wholesaling actually purchasing and closing on the home, she “assign” or passes the contract—the right to buy the house—to another buyer for a fee.

It is possible to assign a fix & flip project, a buy & hold project, a seller-financed deal, residential or multi-family deals, or a commercial deal. Wholesalers are generally very good marketers and negotiators. In other words, they are good at finding deals, negotiating great terms, and getting a signed purchase agreement. So that’s where they focus their time and energy.

Wholesaling is way you can get involved in real estate with no experience and no money. If you don’t have the experience to flip a house, no problem! Just assign the deal to a good flipper and get paid. This is why it has become such a booming industry. Newer investors all over the country are jumping on the wholesaling bandwagon.

Many wholesalers will spend tens of thousands of dollars each month on marketing & advertising to find good properties. They may have acquisition managers or assistants fielding calls, running numbers and negotiating with sellers. As such, wholesaling has become its own separate real estate business, and in many ways, it looks almost like a real estate brokerage—connecting sellers and buyers.

But, with all this new excitement and newer investors, who may not know the rules, wholesaling has now reached the attention of state real estate divisions. In the next blog, I will go over some of the licensing rules and regulations. Then I’ll follow up with three more blogs helping you understand the wholesaling transaction.

Jeffrey S. Breglio, Esq.
Breglio Law Office and REI Mastery 
(801) 560-2180

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