Why Wholesaling Is the Best Business Model in Real Estate Investing 2024

Written by David Dodge

If there’s one business model in real estate that stands out above the rest, it’s wholesaling. It’s accessible, scalable, and doesn’t require a massive upfront investment to get started. Whether you’re new to real estate or an experienced investor looking for a low-risk way to generate quick profits, wholesaling offers a unique opportunity. Unlike traditional real estate strategies, where you may need significant capital or experience, wholesaling allows you to leverage your knowledge, network, and resourcefulness to close deals.

Here’s a closer look at why I believe wholesaling is one of the most powerful business models in real estate today and how the changing market conditions in 2024 are amplifying its potential.

1. You Don’t Need Money to Get Started

One of the biggest myths about real estate investing is that you need a lot of money to begin. The truth is, with wholesaling, you don’t need any significant amount of capital. It’s a model designed for people who are resourceful and willing to hustle. Instead of focusing on how to raise money to buy properties, you focus on finding great deals—properties that are priced below market value because the owner is in a distressed situation.

Once you’ve found a deal, you don’t have to buy the property yourself. You can partner with an investor or a buyer who has the capital to close the deal. It’s common for wholesalers to structure deals where the profits are split, maybe 50/50 or 60/40, depending on the arrangement. The investor puts up the cash, you put in the legwork, and you both walk away with a share of the profit.

In fact, it’s this low-barrier entry that makes wholesaling ideal for those without the large reserves of cash or access to traditional financing options. All you really need is grit, determination, and the ability to spot a good deal when you see one.

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Pavel Danilyuk

2. Wholesaling Thrives on Distressed Properties

The bread and butter of wholesaling is distressed properties. These are homes where the seller is motivated to close fast—whether it’s due to foreclosure, financial struggles, divorce, or simply the need to offload the property quickly. These situations provide an opening for wholesalers to negotiate a favorable deal, usually offering cash in exchange for a steep discount.

Distressed homeowners are often willing to negotiate because they need a fast solution. They don’t want to deal with the hassle of a long sales process, showings, or expensive repairs. In return, you get the property at a discount, and they walk away with cash in hand.

For instance, let’s say a homeowner facing foreclosure is willing to sell their property for 70% of its market value to get out from under the debt quickly. As a wholesaler, your job is to secure that deal and assign the contract to an investor who’s ready to step in. Your profit, which could be anywhere from $5,000 to $50,000 or more, comes from the spread between the seller’s price and what the buyer is willing to pay.

3. Massive Potential for Profit

Unlike many other real estate strategies, wholesaling doesn’t cap your potential earnings based on the value of the property itself. Instead, your profit is determined by your ability to negotiate and the size of the discount you can secure. The more distressed the property or motivated the seller, the larger the margin you stand to earn.

I’ve personally closed deals where I’ve made between $50,000 and $100,000 simply by being the middleman in the transaction. I didn’t have to take out a loan, I didn’t have to manage contractors, and I didn’t have to worry about holding onto a property for months on end. All it took was finding the deal, negotiating the terms, and flipping the contract to an investor who was eager to buy.

It’s this flexibility that makes wholesaling one of the most scalable models in real estate. You can start with one or two deals, but there’s no limit to how many contracts you can flip once you get the hang of it. For those who want to build wealth quickly without tying up their own capital, wholesaling is a perfect fit.

4. The 2024 Real Estate Market: Perfect for Wholesaling

As we head deeper into 2024, the real estate market is presenting even more opportunities for wholesalers. Economic factors like rising interest rates, inflation, and the tightening of traditional financing have led to a shift in how both buyers and sellers approach the market. While these changes may seem like hurdles to some, for wholesalers, they’re creating a golden opportunity.

With interest rates on the rise, many traditional homebuyers are being priced out of the market, leading to an increase in the number of distressed properties. Homeowners facing foreclosure or struggling to keep up with payments are more motivated to sell quickly, often at a discount. This influx of distressed properties has created a fertile ground for wholesalers to find deals.

At the same time, investors are looking for ways to stay active in the market without taking on the financial burden of high interest rates and expensive mortgages. This makes cash deals and quick closes—both hallmarks of wholesaling—highly attractive. Investors are more likely to work with wholesalers who can provide discounted properties and fast transactions, which means wholesalers can command higher fees for facilitating these deals.

Furthermore, inventory shortages continue to affect many markets, pushing investors to seek off-market properties that wholesalers often specialize in. As more investors turn to alternative ways of sourcing deals, wholesalers who can secure distressed properties and offer creative financing solutions are in high demand.

Photo by Sora Shimazaki

5. The Scalability and Flexibility of Wholesaling

One of the reasons I advocate for wholesaling as the best business model in real estate is because of its scalability. Unlike buying and holding properties, where your money is tied up in long-term investments, wholesaling allows you to turn over deals quickly. This quick turnover not only maximizes your cash flow but also reduces the risks associated with market volatility, repairs, and management.

Moreover, you’re not limited to any one market. Wholesaling works in virtually any real estate market, whether you’re focusing on single-family homes, multifamily units, or even commercial properties. As long as you can identify distressed sellers and find motivated buyers, the opportunities are endless.

Conclusion

Wholesaling is, without a doubt, one of the most lucrative and accessible business models in real estate. Whether you’re just starting out or you’ve been investing for years, it’s a strategy that allows you to profit without taking on the risks associated with owning and managing property.

In 2024, the real estate landscape is evolving in ways that are opening even more doors for wholesalers. Rising interest rates, a wave of distressed properties, and a growing demand for cash deals are creating the perfect storm for those ready to take advantage of the wholesaling model. By stepping in as the middleman, you can provide value to both distressed sellers and eager investors, while raking in substantial profits.

If you’re willing to put in the work, wholesaling can be your ticket to building wealth in today’s real estate market. All it takes is the right mindset, a keen eye for deals, and the determination to see them through. With the right approach, you can turn wholesaling into a scalable, profitable business that offers financial freedom and success.