Wholesale real estate refers to a short-term business strategy that investors can use to make quick and steady income in the real estate market.  In wholesale real estate transactions, the wholesaler enters into a purchase contract for a home from a seller for a small earnest money deposit. The contract spells out the amount the wholesaler will sell the property for and the required time period for the sale.

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After the wholesale real estate contract is in place, the wholesaler attempts to find an interested investor. Once found, they reassign the contract to the investor at an agreed-upon higher price. The difference in prices is known as the wholesale fee and can be 5% to 10% of the property price. This goes to the wholesaler.  Usually, wholesalers look for a distressed property that the owner doesn't want to spend time or money on. The owner is usually motivated to sell and often doesn't want to work with a real estate agent.

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Wholesale real estate may be well suited for people interested in real estate transactions but who don't have the financial wherewithal to actually buy and sell properties.

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