Practical wholesaling basics

Wholesaling houses starts with contracts, not ownership: the wholesaler puts a property under contract, then assigns that contract to another buyer for a fee. (rocketmortgage.com) Rocket Mortgage says wholesalers typically target discounted or distressed homes, assign the contract to an investor, and collect a fee that is often 5% to 10% of the property’s value, or about $5,000 to $20,000 per deal. (rocketmortgage.com) That basic setup puts the work on sourcing and pricing deals, not on owning the house. Rocket Mortgage says a strong buyer list helps move contracts quickly, while experienced operators in the field are pushing list-building, direct mail, and repeated underwriting instead of waiting for a perfect lead. (rocketmortgage.com) (x.com 1) (x.com 2) Underwriting is the part where a wholesaler checks whether the numbers still work after resale price, repairs, closing costs, and assignment fee. BiggerPockets describes the common “70% rule” as a rule of thumb: maximum allowable offer equals after-repair value times 0.70, minus repairs, minus the wholesaler’s fee. (biggerpockets.com) BiggerPockets also says that formula has limits, especially on lower-priced houses where fixed costs can eat up the margin. That is why experienced wholesalers often treat “70% of after-repair value” as a starting screen and then underwrite each property with real repair bids, local resale comps, and buyer demand. (biggerpockets.com) (x.com) The contractor and lender checks come in before closing, when a bad rehab estimate or a shaky funding source can blow up an assignment. Experienced wholesalers in the thread said they verify general contractors and lenders early so the buyer does not discover a pricing or financing problem at the last minute. (x.com) The legal side also turns on paperwork and disclosure, and the rules differ by state. Arizona law says a wholesale buyer must disclose in writing to the seller that the buyer is a wholesale buyer, and a wholesale seller must disclose in writing to the buyer that the seller holds only an equitable interest and may not be able to convey title. (azleg.gov) Arizona’s statute also gives the other side an exit if those disclosures are missed: the seller or buyer may cancel before close of escrow, and earnest money rules can shift against the wholesaler. (azleg.gov) Texas guidance reviewed in April 2026 says wholesaling remains legal there if the wholesaler acts as a principal in the contract, uses assignable paperwork, and gives written notice that the deal is an assignment rather than a sale by the property owner. (realestateskills.com) So the practical version of wholesaling is less about finding a magic formula than repeating a process: build a seller list, market to it, price conservatively, and confirm the people needed to close are real. (x.com 1) (x.com 2) (x.com 3)