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What is Wholesale Real Estate?

Updated on January 27, 2010

Wholesale Real Estate refers to distressed properties owned by sellers who are eager to sell them at a discounted rate. Real Estate investors typically purchase wholesale real estate properties, conduct the necessary repairs and rehabilitation, and then sell the property for a profit. Sometimes sellers of wholesale real estate are behind on their mortgage payments, are being transferred for work, have received a notice of default or are trying to sell before they receive a default notice. Wholesale property can also sometimes be REO or bank owned.

Wholesale Real Estate Investment Opportunities

Wholesale real estate presents a great opportunity for a real estate investor to make a profit, but the venture requires that you have certain skills. A real estate wholesaler needs to be able to locate wholesale properties through networking, online searches, or other means. Properties that are bank owned can sometimes be difficult to locate, and so it is very important that you have avenues for finding out when and where wholesale properties are available. Real estate investing clubs, online forums, and other local real estate groups can be good sources for this.

You also need to be familiar with local and state real estate laws in the area in which you’re looking to purchase wholesale real estate. Familiarize yourself with housing trends and financial procedures and make sure you have the ability to effectively market and sell property in your area. Dealing with sellers who are under stress lead to stressful negotiations for you, so be sure that you are prepared to see the process through. Be sure you can negotiate deals for sellers anxious to sell but who want a good price for their home.

Line Up Your Buyers

Before you purchase a wholesale property, make sure you have a list of investors who are interesting in purchasing the wholesale property from you. Purchasing whole sale real estate without a group of serious, interested buyers is a dangerous gamble. Many wholesale real estate investors simply do not have the time to dedicate to finding wholesale properties, so if you put in this effort, you can sell to them for profit.

Finally, before beginning your investment in whole sale real estate, talk to other investors about their experiences and solicit advice to get you started. If you can get advice from investors in your area, that will be especially helpful. It is important to learn everything you can about wholesale real estate investment before you begin. 

Image Credit: griffithchris, Flickr

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  • Ruby H Rose profile image

    Maree Michael Martin 

    5 years ago from Northwest Washington on an Island

    Good investment ideas, thanks.

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