How does wholesale real estate work?

In wholesale real estate, you find a distressed or undervalued property, get it under contract at a low price, then assign that contract to an end buyer (typically a house flipper or landlord) for a fee. You never actually purchase or renovate the property — your profit comes from the assignment fee, typically $5,000 to $20,000 per deal.

What is a typical wholesale assignment fee?

Assignment fees typically range from $5,000 to $20,000, with $10,000 being a common target for beginners. The fee depends on the deal size, local market, and how much margin exists in the deal. On higher-value properties, experienced wholesalers may earn $25,000 or more per assignment.

What is the 70% rule in real estate?

The 70% rule states that an investor should pay no more than 70% of a property's after repair value (ARV) minus repair costs. For example, if a property has an ARV of $200,000 and needs $30,000 in repairs, the maximum offer would be ($200,000 × 0.70) - $30,000 = $110,000. This rule builds in enough margin for profit, closing costs, and holding costs.

Wholesale Deal Analyzer

Calculate your maximum offer price, assignment fee, and end buyer profit on any wholesale deal. Built on the 70% rule that most flippers and investors use to evaluate acquisitions.

Deal Details

After Repair Value (ARV)

What the property will be worth after renovations

Rehab Cost Estimate

Total estimated renovation costs for the end buyer

Desired Assignment Fee

Your wholesale profit when you assign the contract

End Buyer Parameters

These represent what your end buyer (investor/flipper) needs to make the deal work.

Investor's Target Discount (% of ARV)

70%

The 70% rule is standard — most flippers won't pay more than 70% of ARV

End Buyer's Closing Costs (% of ARV)

End Buyer's Holding Costs

Taxes, insurance, utilities, loan payments during rehab

Results

Your Maximum Offer

Maximum Allowable Offer$0

Your Assignment Fee$10,000

End Buyer's Profit$0

End Buyer's ROI0.0%

Closing Costs($0)

MAO = (ARV × Discount%) − Rehab − Closing − Holding

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How to Use This Calculator

1. Enter the After Repair Value (ARV) — this is what the property will be worth after all renovations are complete. Pull comps from Zillow, Redfin, or your local MLS to estimate ARV.

2. Estimate rehab costs — get a contractor bid or use per-square-foot estimates for the scope of work. Be conservative — underestimating rehab costs is the most common mistake in wholesaling.

3. Set your assignment fee — $10,000 is a solid starting point. Experienced wholesalers adjust this based on deal size and market competition.

4. Adjust end buyer parameters — the 70% discount is industry standard, but some investors in hot markets will go to 75-80%. Closing costs and holding costs vary by market and project timeline.

5. Check the deal rating — if the end buyer's ROI is above 20%, you have a strong deal that will attract buyers. Below 10%, you'll struggle to assign the contract.

How Wholesale Real Estate Works

Wholesaling is the fastest way to get started in real estate investing with minimal capital. Unlike flipping, you never buy or renovate the property. Here's the process:

Find a deal — locate a distressed or motivated seller willing to sell below market value. Common sources include driving for dollars, direct mail, off-market deal sourcing, and probate leads.
Get it under contract — negotiate a purchase price low enough to leave room for your fee and the end buyer's profit. Use an assignable contract.
Find your end buyer — build a buyers list of local flippers, landlords, and investors. The deal needs to work for them or it won't close.
Assign the contract — transfer your purchase agreement to the end buyer for an assignment fee. You collect your fee at closing without ever owning the property.

The key to consistent wholesale deals is accurate deal analysis. This calculator helps you verify that a deal works for all three parties: the seller, you, and the end buyer.

The 70% Rule in Wholesaling

The 70% rule is the most widely used formula for evaluating wholesale and fix-and-flip deals. It states:

Maximum Allowable Offer = (ARV × 70%) − Rehab Costs

The 30% discount covers the end buyer's profit margin, closing costs, holding costs, and unexpected overruns. Here's why it works:

~10% for profit — the end buyer's minimum acceptable return on a flip.
~10% for closing and holding costs — buying costs, selling commissions, insurance, taxes, and loan payments during rehab.
~10% for contingencies — unexpected repairs, market shifts, and timeline overruns.

As a wholesaler, you need to go below the 70% rule number by your assignment fee. That's exactly what this calculator computes. If the numbers don't leave room for your fee and the buyer's profit, the deal isn't viable — and it's better to know that before you tie up the contract.