Wholesaling might be one of the most misunderstood—and most debated—strategies in real estate.
Some see it as a fast path to profit.
Others see it as a gray-area hustle that gives the industry a bad name.
The truth? It’s a tool. But like any tool, if you don’t know how to use it—or use it the wrong way—you can do more harm than good.
Let’s break it down:
🧠 Wholesaling 101 – What It Actually Means
At its core, wholesaling is this:
A wholesaler gets a property under contract at a low price,
without planning to buy it themselves,
and assigns that contract to another buyer for a fee.
🧾 Example:
A wholesaler finds a distressed home and offers the seller $100,000.
They put it under contract with an “assignable” clause.
They then find an investor who’s willing to pay $110,000.
The wholesaler assigns the contract to the investor—and pockets the $10,000 difference.
That’s the wholesale fee.
🧯 The Good: Where It Can Work
✅ Solves real problems for distressed sellers who need speed or convenience.
✅ Feeds investor pipelines with properties they’d never find through the MLS.
✅ Can create win-win deals when done ethically, transparently, and legally.
✅ Low barrier to entry means a smart wholesaler with hustle can break into the business and create real value if they focus on relationships and education.
🚨 The Bad: Where It Goes Sideways
Now the not-so-glamorous side.
❌ No license required. In many states (Colorado included), wholesaling can technically be done without a license—until the second you slip into activities that require one.
❌ Bad actors hurt consumers. Some wholesalers market fake inventory, bait-and-switch buyers, or ghost sellers entirely. That damages public trust.
❌ Legal gray areas. Many wholesalers operate in ways that toe the line of unlicensed brokerage—violating state law or local ordinances.
❌ Burnt bridges. When wholesaling gets aggressive or misleading, sellers, agents, and investors stop answering your calls. Fast.
⚖️ Is Wholesaling Legal in Colorado?
⚠️ It depends. Colorado allows wholesaling in very limited circumstances—but:
You must have a valid equitable interest in the property.
You can’t market the property itself unless you own it or are a licensed broker.
You can market the contract—but that’s a fine line, and the language matters.
📌 Bottom line: If you’re not licensed, you can get into legal trouble fast.
📌 Even if you’re licensed, wholesaling as an agent requires extreme clarity and disclosure.
This is one of those “just because you can doesn’t mean you should” situations.
🤝 How Licensed Agents Should Engage With Wholesalers
We work with wholesalers all the time. But here’s how we do it the right way:
1. Build a relationship.
Find wholesalers who are professional, transparent, and consistent. Vet them just like any vendor.
2. Protect your clients.
If you're helping a buyer purchase a wholesale deal, make sure they understand:
The terms of the assignment
Potential inspection issues
The difference between wholesale and retail value
3. Learn the strategy.
Even if you don’t wholesale yourself, understanding it gives you an edge with investors, distressed sellers, and negotiation.
4. Stay compliant.
If you’re licensed and you wholesale anything, you’d better be disclosing your license and acting above board. Always.
💡 Thinking of Trying It Yourself?
Cool. We get it.
But before you throw a bandit sign on a telephone pole, ask yourself:
Do I understand contract law in my state?
Do I have investor partners I actually trust?
Do I have the time to run due diligence, build rapport with sellers, and manage the deal flow?
Do I want to build a business with the brokerage tools I already have, instead of playing on the edges?
Because here’s the thing:
✅ You can build real equity as a licensed agent, serving people well.
✅ You can help distressed sellers the right way—with options.
✅ You can learn creative financing and structure without burning bridges.
You don’t have to “wholesale” to do what wholesalers say they’re doing.
You just have to get smart, stay legal, and lead with value.
🧭 Final Word from the Frontier
We’re not here to bash or glorify wholesaling.
We’re here to make sure agents—and clients—understand what it is, what it isn’t, and how to navigate it ethically.
Because at the end of the day, we’re in this for the long game.
No gimmicks. No gray-area shortcuts.
Just smart strategy, honest conversations, and helping people move forward.
Related Links: