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What is real estate wholesaling?

Real estate wholesaling has become increasingly popular over the last few years. However, many industry professionals are still unsure of what real estate wholesaling is or what function it serves. We’re here to clear up this uncertainty.

Real Estate wholesaling is when a third party between buyer and seller acts as the middleman. The wholesaler will find the property, put it under contract with the seller, and then they will find a buyer to buy the property, making a profit in the middle.

There are several different ways that wholesalers do that. One option is assigning the contract itself from the seller to the ultimate buyer. The other option is by doing a dual closing. In a dual closing, the real estate wholesaler will buy the property and immediately sell it to the buyer on the same day.

Many title companies, as well as lenders, will refuse to participate in double closings. There has to be an involvement from the original seller to the ultimate buyer for Rehab Financial Group to be able to be willing to finance it, and for many title companies to close it. In short, typically the wholesaler needs to get paid on the settlement sheet to satisfy all parties.

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