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What is Reverse Wholesaling in Real Estate?

Jerry Norton

Mar 11, 2024

blue house photography

Unlike other forms of investing, what makes real estate investing unique (and fun) is that there’s no one size fits all to do it — you can fix and flip homes, own rental properties, or wholesale real estate.

It all comes down to your specific situation — and what will turn the most profit. 

What happens if you come across a buyer looking for a property, and you know of a seller interested in selling? 

This is where a unique form of real estate investing called reverse wholesaling comes into play. 

But how do you reverse wholesale, and what are its advantages?\

We’ll break down everything you need to know about reverse wholesaling real estate in this guide. 

Reverse Wholesaling vs Traditional Wholesaling Real Estate

Reverse wholesaling is a twist from traditional wholesaling real estate. In traditional wholesaling, a real estate investors acts as a middleman between a distressed homeowner and a buyer.

After agreeing to a real estate contract with the seller, a wholesaler will then find a buyer, and the wholesaler will take a commission off the deal once it’s finalized. 

With reverse wholesaling, this process is — you guessed it— reversed.

Instead of starting with distressed properties reverse wholesaling begins by finding an end buyer, understanding their property preferences, and then finding a buyer. 

The Benefits of Reverse Wholesaling

Higher Profits

By connecting a motivated and/or distressed seller with a buyer who has specific property criteria, you can negotiate better deals, which can lead to a higher profit margin than traditional wholesaling. 

Flexibility 

Reverse wholesaling provides you with tremendous flexibility throughout the life of the real estate transaction. 

Since you already know buyer's criteria, you can focus on finding properties that match those requirements exactly, another contrast to traditional wholesaling. 

Ability To Pivot

You may be a real estate investor focused solely on fixing and flipping, or you may be focused on acquiring rental properties.

Even with this focus, if you come across a buyer looking for an exact type of property, you can quickly pivot to reverse wholesaling without turning your entire business model upside down. 

How To Reverse Wholesale in 5 Steps 

Next, we’ll take a look at the reverse wholesaling process step by step. 

1) Find Cash Buyers

The first step to reverse wholesaling is to find a cash buyer within your real estate network.

Or, if a cash buyer finds you, it’s onto step 2!

Step 2: Determine Their Criteria

The next step in reverse wholesaling is to determine the criteria of the buyer, including:

  • What is their budget?
  • What size property are they looking for?
  • How much are they willing to repair the property?
  • What type of neighborhood / location are they interested in?

Step 3: Find Deals

Once you know the answer to these questions, the next step is to find properties for sale. 

The best way to do that is to utilize Propwire’s industry leading database where you can search 157+ million MLS & Off-Market Properties (and best of all ) 100% free. 

Once you find a property you believe the end buyer will want to take a look at, you can skip trace to find and contact the owner of the property for just 10 cents. 

Step 4: Present the Property to The Buyer

Ask the buyer their interest level as well as how much they would pay for the property; once you have this number, you can … 

Step 5: Take the Buyer's number to the Seller 

If the seller agrees and there is no more negotiation required, you can close the reverse wholesale deal. 

The Bottom Line: Reverse Wholesaling in Real Estate

Reverse wholesaling is a unique form of real estate investing that can be done full time or as a supplement to your current income. 

Either way, when going through the reverse wholesaling process, you can use Propwire’s expansive database to find your end buyer a property for that deal — and every deal after it.