Wholesaling vs. Fix-and-Flip
Wholesaling involves contracting to purchase a property and then assigning that contract to another buyer for a fee, without ever taking ownership, while fix-and-flip involves actually purchasing, renovating, and reselling the property.
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Wholesaling
The wholesaler contracts to purchase a property, typically below market value, then assigns that purchase contract to another investor for a fee, without ever taking ownership themselves.
- Requires little to no capital for renovation or a down payment
- Faster turnaround per deal than a full renovation project
- Lower financial risk since the wholesaler doesn't take ownership
- Requires strong deal-sourcing and negotiation skills to find below-market properties
- Income depends entirely on finding a buyer willing to pay the assignment fee
- Legal and licensing requirements for wholesaling activity vary by state
Fix-and-Flip
The investor purchases, renovates, and resells a property directly, capturing the full profit margin between total costs and resale price.
- Potential for a larger profit per deal than a typical wholesaling assignment fee
- Full control over the renovation and resale process and outcome
- Requires substantially more capital for purchase and renovation costs
- Higher financial risk if renovation costs run over or the resale market softens
Which one makes sense for you?
Wholesaling requires far less capital and carries lower financial risk, but depends heavily on deal-sourcing skill and finding a buyer for each assignment, with state-specific legal considerations. Fix-and-flip requires significantly more capital and carries more risk, but offers a larger potential profit margin per deal and full control over the outcome.
Key cost factors.
- Available capital — wholesaling requires far less than a flip
- Your skill and network for sourcing off-market, below-value deals
- State-specific legal and licensing requirements for wholesaling activity
- Risk tolerance for capital-intensive renovation projects
Before you decide.
- What are my state's specific legal requirements around wholesaling activity?
- Do I have the deal-sourcing network needed to consistently find below-market properties?
- How much capital do I actually have available if I pursued a flip instead?
Frequently asked questions.
Is wholesaling legal everywhere?
Wholesaling is generally legal, but specific rules and licensing requirements vary by state and are evolving in some places, so it's worth researching your specific state's current requirements before pursuing it.
All figures on this page are illustrative examples for general education, not quotes, appraisals, or guarantees of actual pricing. Actual costs vary by provider, location, project scope, and market conditions — always get a specific quote before making a purchasing decision.
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