How to Wholesale Real Estate in Pennsylvania (2024 Updated)

By unveiling the essentials of conducting a house wholesaling business in Pennsylvania, this article will help you get started.

It gives tips on the basic legalities, effective marketing techniques, and provides additional resources that pave the way for becoming a real estate wholesaler in Pennsylvania.

Read below to start learning.

Yes, it is legal to wholesale real estate in Pennsylvania. As long as you carefully abide by the law, it’s completely lawful as well as throughout the United States.

However, to ensure the legality and compliance of your real estate wholesaling business, it is crucial to acquaint yourself with the Pennsylvania real estate wholesaling laws and comprehend the specific risks of wholesaling real estate.

First, if you operate in the city of Philadelphia, you either need a Real Estate Wholesaler license or be a licensed real estate agent or broker.

Additionally, you should familiarize yourself with the rules and regulations set forth by the Pennsylvania Department of State for a comprehensive understanding of the applicable legal framework in the state.

Another risk lies in using inappropriate language when marketing your contracts to prospective end buyers.

It is essential to note that only licensed Pennsylvania real estate agents or homeowners have the authority to market a house.

As a wholesaler, your role entails marketing the rights and responsibilities associated with a contract, rather than the property itself.

To ensure the utmost legal compliance and protection, it is advisable to engage the services of the best Pennsylvania real estate attorneys.

Seek their expertise to thoroughly review or create templates for your purchase agreement and the assignment contract.

In Pennsylvania, like in other states, wholesalers utilize two primary methods for doing deals: contract assignment and double closing.

Also, living in Pennsylvania is not mandatory to engage in wholesaling houses within the state.

Thanks to the current digital era, you have the opportunity to conduct the entire real estate wholesaling process remotely, regardless of your location.

Let’s start with describing the most popular method.

Contract Assignment

When new investors embark on the journey of learning how to wholesale houses in Pennsylvania, they often prioritize understanding the contract assignment strategy.

Here’s a breakdown of how this approach operates.

To begin, you must secure a purchase contract that is signed by both yourself and the motivated seller, as if you were the intended buyer.

Within the contract, there will be a specific provision enabling you to transfer it to a third party, who will serve as your end buyer.

So in reality, you are not going to purchase the house, despite the contract initially indicating your name as the buyer.

After getting the house under contract, your next objective is to locate an end buyer.

Subsequently, you will facilitate the signing of an assignment contract by both the seller and the end buyer, through which you will transfer the right to purchase the property to the investor who will ultimately acquire the house.

As compensation for assigning the contract, the investor will pay you an assignment fee. This will serve as your profit as a real estate wholesaler.

By employing this method, you are not required to possess the funds essential for acquiring the property.

Following this approach, a wholesale deal can be executed with just a refundable earnest money deposit of approximately one to two thousand dollars.

Double Closing

To gain a thorough understanding of wholesaling real estate, it’s essential to master the double closing method in addition to the contract assignment strategy.

While the latter is more popular, everything you need to know about wholesaling real estate isn’t complete without learning about the former.

In the process of a double closing, two distinct closings take place: one involving the seller and another involving the end buyer.

Wholesalers typically employ the double closing method when they earn a significant assignment fee and aim to keep their profits hidden from the seller and the end buyer.

However, you should consider the pros and cons of real estate wholesaling when utilizing this strategy.

One of the main advantages of the double closing method is the ability to keep your profits undisclosed to both the seller and the end buyer, providing a level of privacy and discretion (except for Philadelphia where you must hold a real estate license which obliges you to disclose your profit).

On the other hand, a notable disadvantage is the requirement to secure transactional funding for the closing if you don’t have your own funds available.

This funding can be obtained from the best Pennsylvania hard money lenders, who are known for their expertise in the field.

When compiling your real estate wholesaling checklist in Pennsylvania, prioritizing finding a wholesale-friendly title company is essential.

It is of utmost importance to collaborate with a reliable title company that possesses a deep understanding of double closings and has the expertise to effectively facilitate them.

Virtual Wholesaling

You can partake in virtual wholesaling in Pennsylvania, regardless of your geographic location.

Having a thorough understanding of wholesaling real estate step by step is crucial when managing transactions remotely, as you won’t have a physical presence onsite.

Prioritize extensive networking efforts to establish connections before securing your initial property under contract.

To effectively manage communication between yourself, the buyer, and the seller, partnering with Pennsylvania investor-friendly real estate agents can be highly beneficial.

Before commencing the process, it is crucial to identify two essential vendors:

1. Find a Pennsylvania wholesale-friendly title company that specializes in facilitating virtual closings.
2. Secure the services of a dependable contractor or home inspector in Pennsylvania who can provide accurate rehab estimates for properties under contract. This will be beneficial for you to analyze real estate deals. It is also important to include an inspection contingency clause in your contract as it will allow the contractor to access the property and provide a reliable estimate before proceeding further.

To facilitate remote document signing before and during the closing, it is recommended to opt for electronic signature software such as DocuSign.

One of the key factors in achieving success is being able to quickly find properties to wholesale that you can price attractively to capture the interest of potential end buyers.

Property owners who are willing to sell their homes at a discounted rate are commonly known as motivated sellers.

There are several types of motivated sellers who often require immediate cash and lack the resources or time to address legal complications or property repairs to sell it by using traditional methods.

To show you where to find distressed properties, we will examine three methods.

#1 Buy Pennsylvania Distressed Seller Leads

One of the most convenient methods is to purchase leads from companies that specialize in various marketing techniques to find motivated home sellers.

These companies typically offer leads for a subscription fee or on a per-lead basis.

Examples of the types of leads that these companies specialize in include homes in pre-foreclosure, properties involved in probate proceedings, properties owned by absentee owners, and other real estate likely to be sold at a discount.

Additionally, there are real estate wholesaling software tools that give an option to buy leads as one of their features.

These tools gather contact information of homeowners, along with details about their properties and specific circumstances making them likely to sell at a discount.

It’s normal that not all leads may result in successful conversions. However, the quality of leads can vary among different companies and the percentage of bad leads may be higher in one service than another.

It is therefore crucial to verify the reputation and track record of a company in generating reliable leads before engaging their services.

Real Estate Bees offers a specialized lead marketplace in the field of real estate. This will enable you to procure high-quality leads specifically tailored for wholesaling or buying investment properties.

To explore various lead providers, you can also refer to this compilation of the top lead generation companies for real estate investors and wholesalers.

#2 Hire an Agency to Do Marketing for You

An alternative option is to entrust the responsibility of wholesale real estate lead generation and other tasks to a reputable agency that specializes in real estate investor marketing.

By hiring a digital marketing agency, you can get a customized plan tailored to your budget and business specifics and have it executed by marketing professionals without your involvement.

This collaboration allows you to shift your focus towards other important aspects of your business, while ensuring your online presence is growing and leads are coming in.

Typically, these agencies charge wholesalers a monthly retainer fee to execute diverse marketing campaigns.

Digital marketing agencies offer a range of services such as real estate website design, social media marketing, PPC ad management for real estate investors, writing blog posts and other content, and implementation of other real estate investor SEO (search engine optimization) tasks.

While paid advertising on social media and in Google Search brings your leads fast, SEO offers a more gradual approach that ultimately produces a self-sustaining lead-generation asset requiring minimal supervision.

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

Starting by doing marketing yourself can help you understand this part of your business better so that you can tell a good marketing company from a bad one when it’s time to hire it.

The initial requirement for your endeavors would be a real estate investor website that can generate motivated seller leads on autopilot.

A website serves as a flexible tool that effectively captures leads coming through various avenues, including online searches and promotions via social media advertisements.

When choosing a website builder, prioritize finding one that enables the creation of a user-friendly and search-engine-optimized resource.

Consider selecting from the current range of the best website templates and builders for real estate investors.

However, don’t confine your marketing strategies to just online avenues. There are numerous offline methods available for identifying motivated sellers, including:

• Driving for dollars to scout potential properties in person
• Exploring public records to find properties behind on tax and mortgage payments
• Utilizing real estate wholesaling postcards
• Placing bandit signs strategically
• Networking with fellow real estate professionals and more.

To market Pennsylvania wholesale properties and find real estate investors, the most effective approach is to possess or have access to a comprehensive list of cash buyers.

Since cash buyers can have varying purchasing criteria, creating separate lists for each buyer type is a smart strategy to ensure comprehensive coverage.

Various types of real estate investors, including hedge funds, real estate investing companies, and individual investors, may exhibit interest in your under-contract properties.

To reach out to these cash buyers, you can employ the marketing strategies for wholesaling real estate.

Build Your Own Cash Buyers List

Building a substantial list of Pennsylvania real estate cash buyers doesn’t happen quickly, so better start doing it through networking as early as you can.

You should consider reaching out to reputable vendors in Pennsylvania who have expertise in working for real estate investors.

These vendors include contractors hired by home flippers or Pennsylvania lenders who lend on properties that Pennsylvania real estate investors buy.

Additionally, it is advisable to actively participate in real estate networking groups. Try finding them on Facebook and take advantage of the virtual and in-person meetings they organize.

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 Pennsylvania and instantly reach thousands of potential buyers!

Leverage Other People’s Cash Buyers Lists

If you haven’t had time yet to collect your own roster of companies that buy houses in Pennsylvania, you have the option to utilize existing cash buyers lists curated by others.

Numerous accomplished professionals in the real estate field and Pennsylvania real estate wholesalers have invested years in cultivating investor connections.

While pursuing this approach can accelerate the growth of your business, it’s important to be aware that list owners typically expect a portion of up to 50% 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 Pennsylvania 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

When engaging in wholesaling houses in Pennsylvania, it is crucial to ensure the completion of two distinct contracts:

• A real estate purchase agreement
• An assignment contract, which facilitates the transfer of the right to purchase the house to the end buyer

The first step involves signing the initial purchase contract between you and the seller, which outlines essential details such as the purchase price, property address, and seller’s information.

Subsequently, after identifying your end buyer, both the seller and buyer will sign an assignment contract.

To close on the property, the title company will ask you for copies of both contracts. This ensures compliance and proper documentation throughout the transaction.

Double Closing

As mentioned earlier, wholesalers employ double closings as a method to prevent the seller or end buyer from being aware of the precise profit made in the transaction.

To successfully complete the closing process, you must provide the title company with two essential contracts:

• The contract for purchasing the real estate (you acquire the property from the seller)
• The contract for purchasing the real estate (the investor acquires the property from you).

Furthermore, if you do not possess sufficient personal funds to cover the full house price, you will need to secure transactional funding.

Transactional funding is a brief loan, usually lasting 1-2 days, that enables you to finalize the purchase with the seller first, and then swiftly complete the sale with the end buyer.

At the time of writing this, you only need to be licensed in Philadelphia. You either need to hold a real estate wholesaler license or a real estate salesperson or broker license.

The practice shows that more and more states pass laws requiring wholesalers to get licensed and imposing other restrictions onto them.

So, consider obtaining a license beforehand to avoid interrupting your business if Pennsylvania adopts such a law as well.

Wholesaling with a real estate license will make you more credible in the eyes of home sellers.

Also, with a license, if you fail to complete a wholesale deal with an investor, you can offer an alternative option to the seller — listing their house for sale as a real estate agent and still making money by getting a realtor commission.

It is worth noting that you must affiliate with a Pennsylvania real estate brokerage if you aspire to become a licensed real estate agent.

It is essential to conduct interviews with various brokerages to select one that supports wholesaling, as many brokers discourage their agents from engaging in it.

To learn detailed information on obtaining a real estate license in Pennsylvania, we recommend referring to our comprehensive guide on how to get a real estate license in Pennsylvania.

Wholesaling real estate in Pennsylvania on its own does not have a specific age requirement.

However, it is crucial to be aware that the legal age for entering into binding contracts in the United States is 18.

Therefore, serving individuals under 18 will be denied by title companies.

If you’re younger than the specified age, you have the option to enlist someone else’s help to sign contracts on your behalf.

In Pennsylvania, it is legally possible to wholesale without forming an LLC.

However, it is crucial to take into account that having an LLC or another type of corporation is a crucial aspect of real estate asset protection strategies.

By operating under an LLC, you can also enjoy tax advantages that are not available if you conduct business as an individual.

Additionally, as an LLC, you become eligible for business loans.

In the Pennsylvania real estate investing community, having a professional business entity will enhance your reputation and credibility.

Moreover, it will instill trust among home sellers, establishing you as a reliable investor.

Many investors begin their real estate journey with wholesaling because it doesn’t require risking high initial investment capital.

To close on a wholesale property, a refundable earnest money deposit of $1k-2k is required.

A clause in a contract protects you from losing it if you back out of the deal for any reason, such as failing to find an investor.

Additionally, if you intend to pursue a double closing and don’t have the entire price of the house in cash, transactional funding becomes necessary.

Transactional funding offers a short-term loan option, making it possible to qualify without stringent criteria such as a high credit score or extensive employment history.

Utilize Real Estate Bees’ “request financing” form to discover the most suitable transactional funding in Pennsylvania.

This efficient tool enables you to effortlessly obtain quotes and compare rates from numerous lenders, all with a few simple clicks.

Also, you will need to allocate funds for your marketing budget — to find motivated seller leads.

It will vary widely, depending on the number of leads you need and the marketing strategy you choose.

To provide you with a rough estimate, a typical assignment fee for a house priced at $150,000 and representing an average property in its community ranges between $10,000 and $15,000.

From there, the level of profit achievable in Pennsylvania through real estate wholesaling is directly proportional to the effort you invest in the process and the number of deals you do.

The success of wholesaling real estate in Pennsylvania is heavily influenced by the particular city or neighborhood in which you choose to operate your business.

However, for a general understanding, you can refer to the trends in the Pennsylvania real estate investing market.

Pennsylvania presents numerous cities that provide advantageous conditions for wholesaling real estate.

Here is a compilation of the top 10 cities in Pennsylvania, with real estate stats provided, that are highly suitable for real estate wholesaling:

1. Philadelphia PA
2. Pittsburgh PA
3. Allentown PA
4. Reading PA
5. Erie PA
6. Scranton PA
7. Bethlehem PA
8. Lancaster PA
9. Harrisburg PA
10. York PA

Although we have provided an overview of the foundational principles of wholesaling real estate for beginners in Pennsylvania, it is essential to seek further knowledge before fully immersing yourself in the industry.

To expedite starting a real estate wholesaling business, consider the following highly effective methods of gaining the necessary expertise.

Courses

Many experienced wholesalers are eager to share their knowledge and help others attain financial freedom.

With their vast expertise, they can develop comprehensive educational programs.

Nevertheless, it’s crucial to be wary of fraudulent individuals who prey on inexperienced wholesalers.

For authentic and valuable real estate wholesaling courses, it is advisable to consult Real Estate Bees’ list of the best real estate wholesaling courses.

Real Estate Wholesaling Mentors

To ensure you stay on track and avoid costly mistakes, it is strongly advised that you engage the services of a reputable real estate wholesaling mentor.

Working with an experienced professional will provide you with step-by-step guidance, keeping you focused and preventing errors.

To help you in developing a comprehensive business plan, set achievable goals, and select effective marketing strategies, consider working with one of the best Pennsylvania real estate investment mentors or coaches.

Books

Expanding your knowledge of the real estate wholesaling business can be achieved through affordable means, such as reading books on the subject.

To explore a wide range of valuable resources, make sure to browse through our comprehensive list of the best real estate wholesaling books.

Investor Clubs

If you’re looking to gain insights from experienced individuals with practical knowledge, consider joining one of the numerous local investor clubs in Pennsylvania.

These clubs provide a platform to connect with active members who are willing to share their firsthand experiences, allowing you to learn more and optimize your business for swift profitability.

Additionally, attending these clubs can be a valuable opportunity to find cash buyers for wholesaling real estate.

To discover reputable clubs to join, we recommend consulting Real Estate Bees’ list of real estate investor clubs in Pennsylvania.

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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.