Do I need an LLC to wholesale?

Strongly recommended. Personal liability on real estate contracts is real; an LLC is $100–$500 of insurance.

What earnest money should I put down?

Whatever the seller will accept. $100–$1,000 is typical for off-market wholesale contracts. Larger EM strengthens your contract; it also raises your risk if the assignment falls through.

Can I sell the contract on Craigslist?

You can market it anywhere, but the deal closes through the title company. Build a buyer list — it is the single most valuable asset in wholesaling.

What if my end-buyer backs out?

Either close yourself (transactional funding, hard money, or your own cash), find a backup buyer (have 3+ on every deal), or negotiate an extension with the seller. Burning the seller is a one-time mistake.

Wholesale vs. Direct Buy — When to Assign and When to Close

Wholesale vs. direct buy — when to assign, double-close, or take title.

Every off-market deal has three possible exits before you ever swing a hammer: assign the contract to another investor, double-close at the title company, or close on the property yourself. The right answer depends on capital, licensing, and the spread.

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Assignment — the wholesaler's default

You contract a property at $190K. You market the contract to your investor list. Another investor agrees to take your spot for an $8K assignment fee. They close at $190K with the original seller and send you $8K from escrow. You never take title and never bring more than your earnest money to the table.

Pros: low capital, fast, simple. Cons: every party sees your fee on the settlement statement, which can spook some sellers.

Double-close — when the spread is big

You contract at $190K. End-buyer contracts with you separately at $215K. Title company runs two simultaneous closings: A→B (you buy from seller at $190K) immediately followed by B→C (you sell to end-buyer at $215K). Your $25K spread is invisible to both the seller and the end-buyer.

Pros: spread privacy, can use end-buyer's funds for the A→B leg in some states. Cons: two sets of title fees, more friction, and 'transactional funding' costs (typically 1–2 points) if you need to fund the A→B leg.

Direct buy — when you have the capital and the chops

You contract at $190K, close at $190K with your own money or a hard-money loan, execute the rehab, and either flip on the MLS or refinance and rent. Profit is highest but timeline is 4–9 months instead of 14 days.

Direct buy is the right call when: spread is huge ($60K+), the rehab matches your team, hard money is cheap, or you want to refi-and-hold for cash flow.

State-by-state wholesaling regulation

Several states have tightened wholesaling rules in the last few years:

Illinois — wholesaling more than 1 property per year requires a real estate license (effective 2020).
Oklahoma — similar 1-deal/12-months threshold.
Texas — disclosure of intent to assign is required to the seller in writing.
Other states — pending or active legislation in PA, FL, OH. Stay current via your local REIA.

Choosing the right exit for the deal

Small spread (< $10K), end-buyer lined up → assign.
Medium spread ($10–25K), spread privacy matters, end-buyer flexible → double-close.
Large spread ($25K+), rehab matches your operation, capital available → direct buy and execute.
Long-term cash-flow play → direct buy and BRRRR.