Real estate wholesalers profit by signing a purchase agreement, then assigning their contractual rights to another buyer for a fee. Nathan Payne Enterprises assigned a $200,000 contract to Bob Cajun Enterprises for $15,000. The wholesaler never owns the house, just the right to sell that right.
The question is, how are you able to use this piece of paper to make money without ever owning the property? So when you sign this agreement saying that you're going to buy someone's house, you are saying, hey, I have the rights, I have the equitable interest to buy your house because we both agreed on this purchase price. You're able to buy the house, right, for what you agreed. And you can go get a hard money loan. You can get a loan. Doesn't matter. Most of the time it says for cash. So you need to get hard money or have cash. Or what you can do is you can assign your right to purchase this property to someone else for a fee. What you do on that assignment agreement is you state state who is under contract, you, your LLC, and the LLC that you're assigning it to. It could be an LLC that you own. You can assign a property yourself or pretty much any entity or any person. So you say, hey, this LLC, Nathan Payne Enterprises, is assigning it to Bob Cajun Enterprises for $15,000. And then let's say the purchase price of the property is $200,000.
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