How to Wholesale Real Estate in New York (2024 Updated)

If you are interested in starting a real estate wholesaling business in New York, this article is for you.

It will provide you with essential information on the types of agreements for both wholesaling strategies, marketing advice, and additional resources to begin wholesaling houses.

By reading on, you’ll gain a better understanding of how to kickstart your real estate wholesaling journey in New York.

It’s legal to wholesale real estate in New York, but there are still risks of wholesaling real estate.

For a better understanding of the applicable laws, it’s a good idea to review the rules and regulations provided by the New York Division of Licensing Services.

In short, according to the New York real estate wholesaling laws, you aren’t allowed to market a house publicly if you don’t have a real estate license.

Only licensed New York real estate agents or homeowners can market a property.

So instead of a property, you should market the rights to the contract to buy it. And you should market them to real estate investors rather than the general public.

And finally, it’s highly recommended that you seek the assistance of one of the best New York real estate attorneys to review or create templates for your purchase agreement and the assignment contract.

There are two primary methods for wholesaling houses in New York: contract assignment and double closing.

It’s worth noting that you don’t need to be on location to conduct this business in New York.

With modern technology, it’s possible to complete the entire real estate wholesaling process from the comfort of your own home, without ever needing to be physically present in New York.

This is called virtual wholesaling, and we will discuss it further.

Contract Assignment

New investors typically start by familiarizing themselves with the contract-assignment method when learning how to wholesale houses in New York.

First, you and the motivated seller sign a purchase contract, as if you were going to buy the property, but without actually having to do so.

The agreement ought to have a provision that permits you to transfer it to a third party, who is commonly referred to as the end buyer.

Both the seller and end buyer are required to sign an assignment contract after getting the house under contract.

This indicates that you will transfer the power to buy the property to the investor who will eventually acquire the house.

As compensation for transferring the contract to them, the investor will provide you with an assignment fee, which serves as your earnings as a real estate wholesaler.

This method allows you to participate in real estate wholesaling without needing to have the financial means to purchase the property.

Like in a normal real estate transaction, to finalize a wholesale deal by using this method, a refundable earnest money deposit of around $1,000 to $2,000 is required.

Double Closing

One of the things on your real estate wholesaling checklist will be mastering the double closing technique.

It’s an essential component of comprehending everything you need to know about wholesaling real estate, even though the contract assignment method is more commonly used.

Wholesalers frequently employ the double closing approach if their assignment fee is significant, and they don’t want the seller or end buyer to discover their profit in the transaction.

A double closing is a process that requires two distinct closings to be held — one with the seller and another with the end buyer.

However, it is important to note that there are pros and cons of real estate wholesaling when using this strategy.

The advantage of double closing is that you don’t have to disclose your profits to either party.

The disadvantage is that you have to obtain transactional funding to close if you don’t have your own cash.

Transactional funding can be provided by one of the best New York hard money lenders.

Also, make sure to find a title company that understands and can facilitate double closings.

Virtual Wholesaling

To engage in virtual wholesaling in New York, you have the freedom to work from anywhere.

Nevertheless, it’s essential to comprehend the complete process of wholesaling real estate step by step before attempting it virtually.

Networking plays a vital role, especially in securing your first property under contract.

Collaborating with New York investor-friendly real estate agents can help facilitate communication between you, the buyer, and the seller.

Find a reliable home inspector in New York or a contractor who can provide rehab estimates for the properties you have under contract.

This is important for you to be able to properly analyze real estate deals.

You also need to make sure that your contract has an inspection contingency clause that allows the contractor to access the property.

Then, you need to find a New York wholesale-friendly title company that can assist you with virtual closings. Not all title companies are experienced in wholesale transactions.

To sign documents remotely, you can use electronic signature software such as DocuSign.

To be successful in New York, it’s essential to learn how to find properties to wholesale.

Not any property will do: you need the ones that can be sold to investors cheaper than their full market worth.

Such properties are sold by different types of motivated sellers who need quick cash and may not have the resources or time to fix physical damage or resolve legal issues with the property.

To find distressed properties, you can use several methods, and we will review three of them.

#1 Buy New York Distressed Seller Leads

One way to find motivated seller leads is by purchasing them from real estate investor lead generation companies or using real estate wholesaling software tools — many of them provide leads as part of their service packages.

These leads are people finding themselves in situations where they need to sell their house to an investor for cash rather than wait for a realtor to find a buyer:

• homes in bad condition
• urgently relocating families
• divorcing homeowners
• people with health emergencies
• heirs who have inherited houses they don’t need, and others

These lead providers may require a monthly fee or charge per lead.

It’s important to note that some of these providers generate better leads than others, so it’s crucial to select a reliable lead source carefully.

You don’t want to pay for leads who aren’t motivated or outdated.

If you’re seeking high-quality real estate leads, Real Estate Bees provides a real estate lead marketplace for you to purchase from.

#2 Hire an Agency to Do Marketing for You

If you want to fully focus on other aspects of your business, you can get leads for wholesaling real estate by entrusting your marketing to an agency providing real estate investor marketing services.

You can expect digital marketers to develop a personalized strategy that fits within your budget and oversee your marketing efforts, and report to you regularly for a monthly charge.

These agencies offer a range of services, including social media marketing, real estate investor PPC services, real estate investor SEO, real estate website design, blogging, and others.

While paid advertising can yield leads rapidly, search engine optimization (SEO) progresses more slowly but can build an asset that generates leads long-term with minimal monitoring.

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

To understand all aspects of marketing before outsourcing it, you may want to take charge of it yourself at first to learn it in practice.

It may be a good idea as this will help you better estimate the service quality provided by a marketing company when you start using it in the future.

First and foremost, you need a well-designed real estate investor website that is optimized for motivated seller lead generation.

You don’t need to code anything. There are ready templates designed for real estate investors and wholesalers. Just customize it to your company’s style and other needs.

A website is your main destination resource for leads coming from online and offline marketing channels.

Choose a website solution that enables you to create a user-friendly and search-engine-optimized resource.

Choose one from the list of the best website templates and builders for real estate investors.

However, it is important not to limit your marketing tactics to online methods alone.

There are several offline techniques available that you can use, such as driving around to locate abandoned properties or homes in disrepair, networking with other industry professionals, using bandit signs, sending postcards for real estate wholesaling, analyzing public records, and many more.

To effectively market New York wholesale properties to real estate investors, it is crucial to possess or have access to an updated and extensive list of cash buyers.

To create such a list, you need to find real estate investors who may be interested in purchasing under-contract properties. This is a tedious process, but it pays off.

There are several types of real estate investors, including individual investors, real estate investing companies, and hedge funds, each with their unique purchasing criteria.

Try various ways to market real estate deals to cash buyers and see which ones work best for you.

Build Your Own Cash Buyers List

Networking is an excellent way to create a list of New York real estate cash buyers.

To begin, it is advisable to join numerous virtual real estate networking groups, which are typically active on Facebook, and hold online and in-person meetings.

Additionally, you can consult trustworthy New York vendors who cater to real estate investors, such as contractors who rehab flippers’ homes or New York lenders who work with New York real estate investors.

By networking, you can expand your professional circle and establish relationships with potential cash buyers in the New York real estate market.

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 New York and instantly reach thousands of potential buyers!

Leverage Other People’s Cash Buyers Lists

Suppose you are unable to allocate sufficient time to create a list of companies that buy houses in New York.

In that case, an alternative approach is to utilize an existing cash buyers list curated by someone else.

Numerous accomplished New York real estate wholesalers cultivate relationships with investors, too, and can lend you their lists, although they may require up to 50% of your assignment fee as remuneration.

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 New York 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 New York via contract assignment means you need to basic agreements:

• Contract to purchase real estate
• Assignment contract

The purchase contract should be signed by both you and the seller. After identifying an end buyer, it is necessary to have an assignment contract signed by both the seller and the buyer.

The purpose of the assignment contract is to ensure transparency with both the seller and the end buyer, making it clear that you are not acquiring the property personally.

For the title company to complete the closing process, copies of both contracts must be submitted.

Double Closing

To close the deal via double closing, you will have to present two contracts to the title company:

• A contract for purchasing the property by the end buyer from the wholesaler
• A contract for purchasing the property by the wholesaler from the seller

If you need cash to cover the total price of the house, you will also have to obtain transactional funding.

This type of loan is typically short-term, usually lasting for 24-48 hours, and allows you to complete the first transaction with the seller before getting your money back by reselling the property.

In New York, wholesaling with a real estate license is not obligatory as long as you don’t market the wholesale property publicly like a real estate agent.

But being able to market a property as a real estate agent, in addition to marketing it as a wholesaler, could expand your likelihood to close a deal if you are having trouble finding an investor. In this case, having a license is necessary.

To obtain a license, you must join a New York real estate brokerage.

Make sure to interview various brokerages and choose one that is open to wholesaling, as many brokers may not allow their agents to cater to real estate cash buyers.

If you’re interested in getting a license, you can refer to our guide on how to get a real estate license in New York for more information.

There is no specific age requirement for real estate wholesaling in New York. However, to enter into a legally binding contract, you must be at least 18 years old.

Therefore, if you are under 18 years old, you may need to have a legal guardian or parent co-sign any contracts related to the wholesaling transaction.

In New York, there is no legal requirement for wholesalers to establish a Limited Liability Company (LLC) to conduct business.

However, forming an LLC may offer some benefits for wholesalers, such as limiting personal liability and providing tax benefits.

In the realm of real estate asset protection, establishing an LLC or another type of corporation is a crucial step.

By doing so, you will be also eligible for business loans unlike when operating as an individual.

Additionally, creating an LLC lends an air of professionalism to your business, increasing your reputation with home sellers.

Due to its relatively low cost, wholesaling is often the go-to strategy for investors just starting in the real estate industry.

You also need to allocate funds for marketing to locate distressed sellers and potential buyers. The amount will largely depend on your preferred marketing strategy.

As in any real estate transaction, an earnest money deposit of around $1,000 to $2,000 will be required to get a property under contract. It may be higher in areas with more expensive properties.

Additionally, if wholesalers intend to double-close on the property, they will need to secure transactional funding, unless they have access to cash reserves.

This means borrowing the full price of the property until getting repaid by the investor.

Transactional funding is a type of loan that is short-term in nature. One significant advantage of it is that you don’t necessarily need a high credit score or a long employment history to qualify.

To locate the most advantageous transactional funding options available in New York, a great tool is the “request financing” form provided by Real Estate Bees.

With just a few clicks, you can use it to obtain quotes and compare interest rates from multiple lenders.

To provide a rough estimate, the average assignment fee for a typical property in a community with a $150,000 price tag can range from $10,000 to $15,000.

However, the ultimate amount of profit you can generate is contingent on how quickly you can expand and develop your business, as well as how much you spend on marketing.

The viability of a market for wholesaling real estate in New York is largely determined by the locality in which you intend to wholesale.

While a detailed assessment of a given market requires careful analysis, you can gain a general understanding of the state of the market by examining trends within the broader New York real estate investing market.

Determining the best cities for wholesaling real estate in New York depends on a variety of factors, including market trends, economic conditions, and local demand for properties.

Some cities that have shown promise for real estate wholesalers in recent years include:

1. Buffalo NY
2. Rochester NY
3. Syracuse NY
4. Albany NY
5. Yonkers NY
6. White Plains NY
7. New Rochelle NY
8. Mount Vernon NY
9. Schenectady NY
10. Ithaca NY

Although we have covered the fundamentals of wholesaling real estate for beginners in New York, it is advisable to get extra training before diving in.

Here are some of the most effective methods to educate yourself on the subject and prepare yourself to become a real estate wholesaler as soon as possible.

Courses

There are many successful wholesalers who are eager to share their knowledge and help others attain financial freedom.

They possess expertise to design comprehensive educational programs.

Nevertheless, there are also a considerable number of fraudsters who seek to exploit new and inexperienced wholesalers.

To discover the most effective courses, you can explore Real Estate Bees’ compilation of the genuine and best real estate wholesaling courses.

Real Estate Wholesaling Mentors

Engaging the services of a real estate wholesaling mentor is strongly advised as it can provide you with detailed and systematic direction.

Being under the tutelage of an experienced individual can prevent you from making expensive errors and keep you on course and concentrated.

A mentor or coach from this list of the best New York real estate investment mentors or coaches will collaborate with you to create a solid business plan, establish realistic goals, and provide guidance to help you become an independent wholesaler with a growing business.

Books

Complement your training with reading books, which is a relatively cheap resource.

To start, check out this list of the best wholesale real estate investing books, which can provide you with a range of valuable resources and additional recommendations to explore.

Investor Clubs

Real estate investor clubs offer a great opportunity for novice wholesalers to go for the first-hand knowledge shared by experienced investors.

Attending these clubs can help you find cash buyers for wholesaling real estate.

Additionally, by joining these clubs, you may find a mentor who can assist you in streamlining your business and making it profitable more quickly.

To find reliable and reputable clubs to join, you can refer to Real Estate Bees’ list of the best real estate investor clubs in New York.

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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.