How to Wholesale Real Estate in Maryland (2024 Updated)

This article is your ultimate guide to launching a wholesaling real estate business in Maryland.

We’ll delve into legal requirements, marketing tactics, and other fundamental aspects to help you become a real estate wholesaler in Maryland.

Whether you’re new to wholesaling or a seasoned professional, you’ll gain valuable insights and tips.

Let’s get started.

One of the most common questions aspiring real estate investors have is, “Is it legal to wholesale real estate in Maryland?”. Yes, it is.

However, understanding the legal aspects of real estate wholesaling in Maryland is vital.

It can help you navigate the industry, avoid legal issues that may arise during transactions, and comply with Maryland real estate wholesaling laws.

Starting out in real estate wholesaling does not necessarily require obtaining a real estate license.

However, it’s important to recognize the risks of wholesaling real estate that could potentially harm your venture.

Failure to choose your words carefully when advertising your contracts to end buyers poses a major risk.

Only licensed Maryland real estate agents and homeowners can advertise a property for sale.

As a wholesaler, you are only authorized to offer the contract’s rights and obligations to an investor, without participating in marketing the property itself to the general public.

To better understand Maryland’s laws, familiarize yourself with the rules and regulations set forth by the Maryland Real Estate Commission.

To ensure legal compliance, seeking guidance from the best Maryland real estate attorneys can be invaluable. Get their expert advice on drafting or reviewing purchase and assignment contracts.

In Maryland, much like in other states, wholesalers use two common methods:

1. Contract assignment
2. Double closing

It’s important to note that you don’t need to be physically located in the city where you wholesale.

Fortunately, technology has made it possible to complete the entire real estate wholesaling process virtually from the comfort of your home. Digital tools and platforms have made remote work easier.

Let’s explore each method in greater detail.

Contract Assignment

As you learn how to wholesale houses in Maryland, the first strategy you’ll come across is the contract assignment method. Here’s a rundown of how it works.

The first step is acquiring a purchase contract signed by both you and the motivated seller. The contract says that you’re the designated buyer, even though you don’t have to purchase the house.

Importantly, the contract should include a clause that permits you to assign it to an end buyer.

After identifying an end buyer and getting the house under contract, your next task is to obtain signatures from both the seller and the end buyer on an assignment contract.

This document transfers the rights and responsibilities of the original purchase contract to the end buyer, who will be responsible for purchasing the property.

When you assign the contract to an investor, they will pay you an assignment fee, which is your profit.

Following this method, you can bypass the need for your own funding to acquire the house.

Participating in a wholesale transaction by using this method requires a refundable earnest money deposit of around $1,000 to $2,000.

Double Closing

To learn everything you need to know about wholesaling real estate, it’s crucial to have a comprehensive grasp of both the widely used contract assignment strategy and the less common double closing method.

The double closing approach involves two distinct closing transactions.

Wholesalers find this method favorable when they expect a substantial assignment fee and wish to conceal their profits from both parties.

The pros and cons of real estate wholesaling through double closing are the following.

While it offers the advantage of concealing your profits from both parties, you’ll need transactional funding if you lack sufficient funds to facilitate the closing process.

The best Maryland hard money lenders can provide this necessary funding.

Another drawback of the double closing method is that it can become costly since you will have to bear the closing costs initially as a buyer and then once more — as a seller.

Since distressed sellers are typically short on cash, you may need to take on their closing costs. This can add to the expenses associated with the double closing method.

Your real estate wholesaling checklist should also include partnering with a trustworthy title company with comprehensive understanding of double closings.

Not all of them know how to handle this type of transaction, and you want a closing to go smoothly.

Virtual Wholesaling

Virtual wholesaling in Maryland is a flexible option that can be pursued from anywhere.

However, operating remotely can be challenging, so it’s vital to have a solid grasp of wholesaling real estate step by step before you dive in.

To start on the right foot, invest time building relationships with industry players and networks in Maryland.

Two vendors you’ll need by your side are:

1. An experienced contractor or home inspector in Maryland who knows the ins and outs of rehab estimates to enable you to analyze real estate deals. Be sure to incorporate an inspection contingency clause in your contract. It enables your contractor to access the property and provide an accurate estimate.
2. A Maryland wholesale-friendly title company that has experience facilitating virtual closings.

Collaborating with Maryland investor-friendly real estate agents adds value to your communication channels and saves you time in negotiations.

Consider utilizing electronic signature software like Dotloop or DocuSign to streamline your remote wholesaling process in Maryland.

To wholesale real estate successfully in Maryland, it’s important to learn how to find properties to wholesale that you can offer to investors at a discount and still make a profit.

Individuals who are ready to sell their properties at a lower price than market value are known as motivated sellers.

Different types of motivated sellers who are good candidates for wholesale deals generally have a pressing need for cash.

They may lack the time or resources to address physical condition or debt issues that could prevent them from selling through conventional means.

Let’s examine different methods you can use to find distressed properties.

#1 Buy Maryland Distressed Seller Leads

One effective approach to locating distressed properties is to purchase leads from companies whose main focus is to find motivated home sellers and sell their information to you.

Real estate wholesaling software tools also have lead purchase as one of their features.

These companies use various techniques, such as targeted advertising and public records data collection, to find homeowners who need to sell their homes quickly and for cash.

Here are some examples of leads that these companies sell:

• Individuals who own vacant properties
• Properties whose owners have missed mortgage payments and are at risk of foreclosure
• Homes with property tax debt and are about to be foreclosed by the county
• Properties that are involved in the probate process after the owner’s death
• Properties that are being sold as part of a divorce settlement
• Properties that require repairs or renovations, and more.

These companies may offer two payment models: a per-lead fee or a subscription package.

It’s normal that not every lead will be fruitful. But still, the quality of leads can vary significantly depending on the provider.

To minimize the number of bad leads, choose a reputable company with a proven track record of generating high-quality leads.

Real Estate Bees offers a robust real estate lead marketplace where you can find and purchase valuable leads. You can also sell leads that you generated.

You may also want to explore the best lead generation services for real estate wholesalers and compare different providers.

#2 Hire an Agency to Do Marketing for You

Another practical solution is to assign wholesale real estate lead generation and other relevant tasks to a specialized real estate investor marketing agency.

These agencies will create a customized plan that fits your budget and handles all aspects of promoting your company.

This way, you can dedicate your time and resources to other critical areas of your business.

Digital marketing agencies offer a wide range of services, including:

• real estate investor SEO
• filling your website with content
• developing a social media strategy
• PPC ad management for real estate investors
• real estate website design

Some strategies, such as pay-per-click or social media ads, may provide instant results for your real estate business.

Nonetheless, it’s crucial to factor in long-term marketing strategies like SEO that can gradually attract leads with little effort and regular investment.

Keep in mind that not all digital marketing agencies deliver on their promises.

In addition, most digital marketing agencies charge a regular monthly fee for their services rather than get paid on a result-oriented basis.

Just like lead providers, these companies can be unscrupulous, failing to deliver services as advertised.

If you are leaning towards hiring an agency, you have to be able to sift through an overwhelming sea of bad companies to find one that will serve you as advertised.

But since you are our reader, our team has already done all the heavy lifting for you. We’ve polled and surveyed thousands of our real estate wholesaler members and the overwhelming majority recommended Magnyfi, run by Jacob Hicks.

The service provided by Magnyfi is not cheap. But it is definitely worth it if you are serious about growing your real estate wholesaling business.

Go ahead and watch Jacob’s video presentation on the Magnyfi profile page discussing their methodical process they have been using to successfully help other investors grow their businesses.

#3 Do Your Own Marketing by Yourself

Taking charge of your marketing efforts can give you a deeper understanding of this part of your real estate business.

This can be valuable when hiring a digital marketing agency later and interviewing it.

Your experience will allow you to distinguish between agencies that seem professional and those that don’t know what they are doing.

The first thing you need to do is to get a real estate investor website and set it up for motivated seller lead generation.

A website can serve as a central hub, allowing you to leverage multiple channels like social media ads and online searches from which motivated seller leads will be coming.

With so many options on the market, pick one of the best website builders for real estate investors. They provide pre-made website solutions with real estate wholesalers’ needs in mind.

It’s essential to have a comprehensive marketing plan that includes both online and offline strategies to attract motivated sellers.

You can leverage these common offline tactics to attract motivated sellers:

• Driving around neighborhoods to identify potential investment properties
• Searching through public records to find off-market tax- or mortgage payment-delinquent deals
• Building relationships with other real estate professionals
• Installing bandit signs in high-traffic areas
• Utilizing real estate wholesaling postcards.

A list of cash buyers is a vital resource to find real estate investors to dispose of Maryland wholesale properties taken under your contract.

Different types of real estate investors who may be interested in making a purchase include but is not limited to:

• hedge funds
• real estate investing corporations
• small investors

Keep in mind that each type of buyer will have unique buying criteria. Because of this, group cash buyers by types in your list and don’t limit it to one specific type.

These marketing strategies for wholesaling real estate can help you access and connect with these cash buyers.

Build Your Own Cash Buyers List

Building a comprehensive list of Maryland real estate cash buyers takes time and effort. Therefore, start networking as early as possible.

Participating in real estate networking clubs and industry associations, such as REIA, is an effective way to meet investors face-to-face.

Another strategy is to reach out to reliable vendors who work with real estate investors.

For example, you can connect with contractors who have flippers as their clients or Maryland lenders who fund Maryland real estate investors.

Building a cash buyers list doesn’t happen overnight. It’s a continuous process. Fortunately, it can be significantly sped up by Real Estate Bees’ revolutionary invention — Property Marketplace Widget for Wholesalers.

It basically allows you to build your own cash buyers list on autopilot, and it’s the only online tool of this kind on the market.

What’s even more powerful is that this tool lets you syndicate your contracted properties directly to Real Estate Bees’ massive marketplace of wholesale deals for sale in Maryland and instantly reach thousands of potential buyers!

Leverage Other People’s Cash Buyers Lists

If you’re short on time to build your own list of companies that buy houses in Maryland, leveraging other people’s cash buyers list can be an effective option.

Thriving Maryland real estate wholesalers and other professionals have dedicated significant time to foster relationships with investors, and you can take advantage of this.

However, note that list owners may demand up to half of your assignment fee.

If you want to avoid giving away half of your profits while using someone else’s cash buyers list, you can use a robust property syndication tool developed by Real Estate Bees to help wholesalers with the disposition.

The tool lets wholesalers leverage Real Estate Bees’ extensive list of Maryland cash home buyers to blast their contracted properties for free.

To take advantage of this cutting-edge functionality, create your free account and list your contracted properties.

Contract Assignment

Wholesaling houses in Maryland by contract assignment requires having two essential documents signed:

• assignment contract
• contract to purchase real estate

To start wholesaling a property, you and the seller must sign the initial purchase contract that outlines the terms of the transaction and provides the seller’s information, purchase price, and property address.

After finding an end buyer, both the seller and buyer must append their signatures to the assignment contract.

This step demonstrates transparency to both parties and confirms that you are acting as a wholesaler rather than purchasing the property yourself.

It’s important to provide copies of both contracts to the title company for closing.

Double Closing

As noted earlier, wholesalers may choose double closing when they want to conceal their profits from the seller and end buyer.

To complete this process, you’ll need to present the title company with two contracts:

• Contract for the wholesaler to buy real estate property from the seller
• Contract for the end buyer to purchase real estate property from the wholesaler

Securing transactional funding is crucial if you don’t have sufficient funds to cover the property’s full price.

This is a short-term loan that lasts between 24-48 hours, allowing you to close the deal with the seller before quickly closing with the end buyer.

An active Maryland real estate license is not a requirement to start engaging in wholesaling activities within the state.

However, wholesaling with a real estate license can provide additional protection and opportunities for you and your business.

Acquiring a license allows you to market a property as both a wholesaler and a real estate agent.

Becoming a licensed real estate agent requires you to join a Maryland real estate brokerage.

Note that some brokers don’t allow their agents to engage in wholesaling activities. To avoid any misunderstandings, it’s important to review different brokerages and select one that allows wholesaling.

For more information, we encourage you to explore our in-depth guide on how to get a real estate license in Maryland.

Maryland has no specific age requirement for wholesaling real estate. However, the minimum age to enter into legally binding contracts in the United States is 18.

If you’re younger than 18, title companies won’t work with you. This is because any contracts you sign with sellers will not be legally binding, leaving you vulnerable to potential legal issues.

So, if you’re not yet 18, consider collaborating with someone who can sign contracts on your behalf. This ensures that your deals are legitimate and secure.

Engaging in legal wholesale real estate in Maryland doesn’t necessitate the formation of an LLC.

Although not mandatory, setting up the right business structure can offer additional protection to your enterprise.

It’s a smart move that can unlock tax benefits that wouldn’t be available if you operated solely under your name.

Incorporating your real estate wholesaling business as an LLC or another type of corporation is a crucial step in any real estate asset protection strategy.

It would open up new opportunities, such as qualifying for business loans that may not be accessible if you were operating as an individual.

Establishing an LLC can enhance your reputation and credibility as a professional investor in Maryland’s real estate investing scene.

This makes it easier to build trust with home sellers as well as colleagues.

Wholesaling is often considered the most cost-effective real estate investment strategy. For this reason, it’s a popular starting point for many investors.

While you’ll need some marketing funds to locate motivated sellers and potential buyers, there are various methods to minimize these expenses by using marketing strategies we’ve previously outlined.

You’ll need to have around $1-2k available to put down as an earnest money deposit when wholesaling real estate.

Additionally, if you plan on double closing, you’ll need to secure transactional funding unless you use your own cash.

Fortunately, transactional funding is a type of short-term loan that doesn’t require a high credit score or employment history to qualify for.

The Real Estate Bees “request financing” form is a valuable resource when searching for transactional funding sources in Maryland.

This form can assist you in obtaining quotes and comparing rates from various lenders seamlessly.

When wholesaling real estate in Maryland, the earnings you can attain are generally proportional to the hard work you put in.

For example, for a typical property in the community that costs $150,000, the average assignment fee ranges from $10,000 to $15,000.

However, the potential for profit growth hinges on how quickly you can develop your business.

To determine the potential of the wholesaling real estate market in Maryland, it’s important to consider the specific city or neighborhood in which you’re interested.

For a more comprehensive outlook, you can analyze the current trends within the Maryland real estate investing market.

The best Maryland cities to wholesale real estate are the same as the ones for investors to buy rental or flip properties.

You want to work where your clients — landlords and flippers — actively buy houses. Investors are attracted by stable markets with growing population and property prices.

Here are the top Maryland cities matching this criteria:

1. Ellicott City MD
2. Mount Airy MD
3. Columbia MD
4. Sykesville MD
5. Baltimore MD
6. Rockville MD
7. Frederick MD
8. Towson MD
9. College Park MD
10. Cumberland MD

While we’ve provided a wholesaling real estate 101, it’s important to develop a deeper understanding of the industry before diving in head first.

To gain comprehensive insights on how to get started in wholesaling real estate, consider the following approaches.

Courses

Some successful wholesalers are committed to passing on their knowledge to others and enabling them to achieve financial independence.

Many have acquired sufficient expertise to create comprehensive educational programs on the topic. Nonetheless, you should be cautious of those wanting to prey on newbie wholesalers.

Real Estate Bees’ list of the best real estate wholesaling courses is an excellent resource for finding high-quality educational programs.

The training programs on this list are tested by hundreds of wholesalers who have found them useful or even pivotal in their career.

Mentors

For personalized and detailed guidance, we suggest considering the services of an expert specializing in real estate wholesalers mentorship.

Working with a mentor can provide valuable assistance that helps you navigate potential challenges and stay committed to achieving your goals.

Consider picking one from the best Maryland real estate investment mentors or coaches.

The best mentors will guide you in creating a comprehensive business plan, setting realistic goals, and help you avoid learning on your own mistakes.

Books

Books can be a great resource to learn the ins and outs of real estate wholesaling without breaking the bank.

Two books that are often recommended for beginners are:

1. The Beginner’s Guide to Wholesaling Real Estate by Jeff Leighton
2. Real Estate Investing Gone Bad by Phil Pustejovsky

You may also find other useful books by looking through the best books on wholesaling real estate list. You will get more suggestions.

Investor Clubs

Maryland has a variety of local investor clubs that offer opportunities for individuals looking to gain firsthand knowledge and insight into real estate investing.

By joining these clubs, you can learn from experienced members with a wealth of practical experience in the industry.

Attending these clubs is a great way to find cash buyers for wholesaling real estate, mentors, and partners.

Real Estate Bees’ list of real estate investor clubs in Maryland is a useful guide to finding clubs to join.

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About the Author

With over 20+ years of experience in real estate investment and renovation, Brian Robbins brings extensive knowledge and innovative solutions to the HouseCashin team. Over the years Brian has been involved in over 300 transactions of income producing properties across the US. Along with his passion for real estate, Brian brings with him a deep understanding of real estate risks and financing.