Can You Wholesale a Foreclosure?

Wholesaling can be a profitable and rewarding form of real estate investing. Since it can be an "unconventional form" of real estate investing, new and even experienced investors have questions about it, including whether or not you can wholesale a foreclosure.

Yes, you can wholesale a foreclosure, and we'll break down everything you need to know about it in this article.

Before getting started, let's make sure we're on the same page with the concept of wholesaling and a foreclosure.

Wholesaling real estate is when you find a distressed property, enters into a contract with a homeowner for the rights to sell the property, and then market that property to other potential buyers.

Once a new buyer is found, you as a wholesaler assign their rights under the contract to the new buyer and earn a fee for your work as a middleman.

A foreclosure occurs when a homeowner gets behind on their mortgage payments.

After a lengthy pre-foreclosure process where the bank tries to resolve it, a Notice of Default then kickstarts the foreclosure process, and the property eventually goes to public auction.

Now, if you can find the property while it's in pre-foreclosure or even before it goes to public auction, you may be able to save it from foreclosure. 

How to Wholesale a Foreclosure

Step 1: Finding Foreclosure Properties

The first step is to identify potential foreclosure properties. 

While you can do this by following public foreclosure notices and/or working with real estate agents specializing in foreclosures, the easiest (and cheapest) way is through Propwire.

With Propwire, you can search 157+ million MLS & off-market properties 100% free!

That’s right, no strings attached. 

By simply choosing from the pre-foreclosure lead type in Propwire’s database, the map will filter to only foreclosures in your area.

Step 2: Negotiating with the Owner

Once you’ve found a foreclosure you’d like to wholesale, the next step is to talk to the owner. 

How can you do this?

With Propwire, it’s never been so easy. 

By using Propwire’s industry-leading skip trace feature, you can find the property owner’s name, address and contact information for just 10 cents. 

Step 3: Making an Offer and Signing a Wholesale Contract

Once you contact the owner and explain that you'd like to wholesale the property (and not purchase it yourself), the next step is to agree on a marketable price and signing a wholesale contract.

Step 4: Find a Buyer

After securing the contract, your next step is to find a buyer for the property, whether it's a real estate investor looking to add the property to their portfolio or someone looking for a discounted home.

Step 5: Buyer Purchases the Home

Once the buyer agrees to the price, the closing process begins, involving the transfer of ownership and the completion of all necessary legal and financial formalities, including inspection, transfer of funds and more.

The Bottom Line: Wholesaling a Foreclosure

There you have it: wholesaling foreclosures.

Yes, you can wholesale a house in pre-foreclosure or even foreclosure. By getting to the owner before the house goes to public auction, you give yourself (and the homeowner alike) the chance to to prevent a foreclosure.

If you're looking for a foreclosure to wholesale, use Propwire's industry leading search tool for FREE now.

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