The term "wholesale" has many misconceptions. Some people will tell you it's illegal without a Realtor's license. This is most likely due to a lack of information. The truth is, yes, wholesaling is legal, if done properly.
The difference between wholesaling and brokering
If you are a real estate broker, one of your jobs is to sell a property for someone else. You do not have any interest in that property: i.e. you don't own it, you don't want to own it, and you are under no obligation to buy it.
To "Wholesale" a property is to find a buyer for a home that you have an interest in. Repeat: You have an interest in purchasing the property. That means that you have a contract with the seller of the building to purchase it. Whether that is through an Option to purchase or a real estate Purchase and Sales Agreement is up to you. To wholesale is to assign your interest in that property over to someone else. You have an obligation to purchase, and you are assigning that obligation to someone else.
Why would we wholesale?
There are many reasons that we might assign our interest in a property to someone else. The most prominent one being cash flow. If a business is unable to pay its debts, it goes bankrupt. Simple, right? Buying a house that will make you a million dollars means absolutely nothing if you don't have the cash to pay for the closing costs! This is just one of the reasons that we might choose to assign our contract instead of purchase a property. Another could be the fact that our circumstances have changed and we cannot close on the property ourselves.
For more information of our business intent regarding selling and assignments, please see our online version of the statement of investment intent.