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Like any commodity, in  real estate you can be retail or wholesale.

Hi, Isaac Toussie here with another article on the property market, this time examining how going wholesale can mean very big profits.  But, as my long-time readers now know, it’s not an Isaac Toussie article without the legal disclaimer: what follows is my personal opinion, informed as it may be by my several years of first-hand experience as a professional land developer in one of the world’s most dynamic property markets, that of New York City – and therefore should in no way be misconstrued as business advice of any sort whatsoever, for which readers are urged to consult instead with the likes of lawyers and accountants when faced with decisions of potentially momentous consequences!

Now, having said all that, let’s get back to today’s topic: wholesale real estate.

We all understand what retail and wholesale means in terms of products such as cell phones and laptops: there is a manufacturer of these goods, who sells to a wholesaler who sells to a retailer who sells to the general public.  So your smartphone is made in Asia, gets bought by a wholesaler who sells in bulk to your local store, the retailer.

In real estate, your realtor or real estate agent is the retailer.  Sometimes they get their properties directly from the owner, who in this industry is analogous to the manufacturer of a product (said product being the house or property).  Other times, the real estate broker goes through a real estate wholesaler.

Generally speaking, a real estate wholesaler is anyone who sells property to a real estate retailer.  The term “real estate wholesaler” is also generally synonymous with “real estate investor.”  Such people look for distressed properties, property where the owner absolutely has to sell for one reason or another (divorce, a necessary move, bills, et cetera).

Now real estate wholesalers have gotten a bad rap in recent years due to the proliferation of late-night TV get-rich-quick schemes which advocate “flipping” properties for some easy money.  While the method is sound in principle, the marketplace has become so saturated with its devotees that practically everyone is savvy to the practice and in on the game.  So it’s highly unlikely that you will find anyone naive enough to sell perfectly good property for a minuscule fraction of its true market value.

No, your job as a wholesaler of real estate is to do the best you can, understanding that your financial success rests more on the number of properties you “move” rather than the absolute amount of profit you can skim off each transaction.  Thus, do not feel cheated at rates of six percent, which would actually be the high end for the wholesale real estate business!