Wholesaling or "flipping" a property involves finding a fixer-upper, snapping it up, and immediately reselling it to another investor who will rehab the property and make a profit from the improvements. There below are tips for those who want to get started with wholesaling.

 The first step in wholesaling is finding a bargain or "distressed" property. These are often FSBOs (For Sale By Owner's) or properties listed on the MLS (Multiple Listing Service). The most important step, though, is making the offer. You can't make a profit if you don't make an offer.

You must keep the customer- the ultimate buyer who will be doing the renovations- in mind when you make your offer.  Some wholesalers use a speculative strategy and make large amounts of money off one deal, but a more conservative strategy often nets as much income when it's applied steadily over many deals.

Your offer should be based on a low-ball estimate of the market value of the property after repairs minus a profit margin for the rehabber. Don't forget to factor in money for closing costs (both for buying the property and for reselling it to the retail buyer), money for holding costs, money for repairs a profit margin for yourself. Typically, remember to factor in (the greater of ) 30% or $25,000 for profit, closing and holding costs, money for repairs and about $5,000 for wholesale profit. On some deals, you may make $15,000 in profit, or maybe a little less than $5,000.

Once your offer is accepted, you will meet with the seller or a real estate agent to sign the contract and give them an earnest money deposit. After signing the contract, you need to contact your settlement attorney a soon as possible to start a title search and schedule a settlement date. Starting these steps immediately mean you'll be ready to settle when you've said you'll settle. It also means that if you find a buyer who says he's ready to buy, he can settle right away.

Anyone interested in wholesaling will want to have a list of possible buyers already in mind. After you have signed the contract and started the title process, the next step is to call those potential buyers. At the same time, you'll want to place an ad in the Investment Properties section of the local newspaper's Sunday edition.

Eventually, you will find one or more possible buyers for the property. The more people you have interested, the less flexible you will have to be on the sales price. You must make sure the prospective buyer can either pay cash or provide proof that he has a line of credit. If he can do neither, he must be able to borrow the money from a private lender to purchase your property in cash.

Once you're sure your potential buyer actually has the funds needed, it's time to meet the buyer and execute a sales contract or an assignment agreement and collect a deposit. The sales contract serves as the receipt for the deposit. It's important to type in or hand write onto the contract something like "Received $(insert dollar amount) as an earnest money deposit on (insert date)." Then initial the agreement once you receive the deposit. You can also include the check number or write "CASH" if they give you cash.

Next, the executed contract with the original seller and the executed sales contract or assignment agreement with your buyer go to your attorney. After that, it's time to schedule a settlement date. At the settlement, pick up your check!

You'll find out that not everyone who signs a contract to buy a home from you will actually end up buying that property.  To avoid this, you must take control of the entire process, controlling every detail: line up contractors and lenders, start the title work yourself through your own attorney, and mandate that buyers must use your attorney. If you don't take control, you will have deals fall through. By taking control of the process, you can increase your chance of a successful closing.