Plain-language answers about wholesaling, assignment fees and selling to investors.
A wholesaler signs a contract to buy a property, usually at a discount from a motivated seller, and then either assigns that contract to another buyer for a fee or buys and immediately resells the property (a double close). The wholesaler is paid from the difference between the contract price and what the end buyer pays.
Generally yes, when it is done as a principal with a real contract. Texas Occupations Code §1101.0045 lets a person without a real estate licence market a purchase contract or option, but requires a written disclosure to potential buyers that only the contract interest is being offered. Marketing property you do not control, or acting for others for a fee, can be unlicensed brokerage. Rules differ in other states. Ask a real estate attorney before you start.
Not in most cases in Texas if you follow the rules above, but licensing law is detailed and changes. Some investors choose to get licensed. A licensed broker or attorney can tell you what applies to your plan.
Wholesaling needs less capital than buying, but it is not free. You need earnest money for each contract (the amount is negotiated and varies widely), marketing money to find sellers, and a budget for an attorney to review your contracts. Many beginners spend money on marketing for months before closing a deal, and some never do.
It is the amount the end buyer pays the wholesaler to take over the purchase contract. It is negotiated deal by deal, is usually shown on the closing statement, and is not guaranteed: if no buyer is found, the wholesaler may lose the earnest money or have to cancel during the option period.
A rule of thumb: an investor should pay no more than about 70% of the after-repair value (ARV) minus repair costs. It is a quick screen, not a decision. Holding costs, selling costs, financing and local price levels can make the right number higher or lower.
It can make sense if speed, certainty or avoiding repairs matter more to you than the highest price. Ask whether the buyer intends to assign the contract, keep the option period short, make sure earnest money is held by a title company, and compare the offer with what a licensed agent thinks the home would sell for.
No. WholeResell is an educational website. We do not buy, sell, list or broker real estate, we do not make cash offers, and we do not run a deal list.
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