Wholesaling compared with Fix and flip
| Decision point | Wholesaling | Fix and flip |
|---|---|---|
| Property ownership | Often no completed purchase before assignment | Buyer takes title |
| Capital exposure | Earnest money, diligence, marketing, and transaction costs | Purchase, rehab, carrying, financing, and sale costs |
| Primary execution | Seller contract and qualified end buyer | Construction and resale |
| Revenue | Assignment or transaction spread | Net sale proceeds minus total project cost |
| Key failure risk | No buyer at a workable price | Cost, time, scope, or resale miss |
How the difference changes a deal
If an end buyer can pay no more than $165,000 and still achieve the required flip margin, a $10,000 assignment fee leaves a $155,000 maximum seller contract price. The wholesaler's spread must fit inside the buyer's real project economics.
A practical decision framework
- Calculate the end buyer's complete deal before setting an assignment fee.
- Show rehab and ARV evidence clearly rather than marketing only a spread.
- Understand local licensing, disclosure, marketing, and contract rules before operating; requirements vary by jurisdiction.
Frequently asked questions
Does a wholesaler renovate the property?
Usually not in a straightforward assignment model. The end buyer takes on the renovation after acquiring the property.
Why do wholesalers need flip math?
Because many end buyers are flippers. If the buyer cannot preserve a viable margin after the assignment fee, the contract is difficult to sell.
Is wholesaling legal everywhere?
Rules vary and can regulate licensing, disclosures, contract marketing, and transaction structure. Consult qualified local counsel or regulators for the jurisdiction involved.
This guide is educational and does not provide investment, lending, tax, legal, or appraisal advice. Verify inputs and requirements for the specific property and jurisdiction.
Compare the strategies on the actual property.
PropLurk connects six underwriting models with one acquisition pipeline.