Wholesale Real Estate

Definition

Wholesaling is a real estate strategy where the wholesaler signs a purchase contract with the seller, then assigns that contract to an end buyer for an assignment fee. The wholesaler typically never takes title — the closing happens directly between original seller and end buyer, with the wholesaler's assignment fee paid at close. Wholesale fees range from $5,000 on small-scale deals to $50,000+ on institutional-quality deals. Wholesaling is regulated state-by-state — some states require a real estate license to wholesale, some require disclosure to all parties, some prohibit it without title transfer.

Worked example

Wholesaler signs a $200,000 purchase contract on a distressed property with a 30-day inspection period. Markets the contract to a flipper for $215,000. Flipper signs an assignment for $15,000. At close, $200k goes to seller, $15k to wholesaler, and the flipper takes title. Total cost to flipper = $215k (purchase + assignment fee).

How DealIntel uses it

Wholesale fees are line items in DealIntel's MAO formula and the 70% rule calculator. Deals where wholesale fee inflates effective purchase price above MAO are flagged by the kill list before underwriting proceeds.

Related terms

• The 70% RuleA fix-and-flip discipline that caps the maximum allowable offer at 70% of ARV minus rehab and costs.
• After Repair Value · ARVThe estimated market value of a property after planned renovations are complete.
• Earnest Money Deposit · EMDA good-faith deposit a buyer puts down with the offer — typically 1–3% of purchase price — held in escrow until close.

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