If you’re already dabbling in tax lien or tax deed investing, you might be wondering, “What’s this wholesaling thing everyone keeps talking about?” Or maybe you’re completely new and just trying to connect the dots in real estate. Either way, you’re in the right place.
Wholesaling is one of the most popular entry points into real estate because it doesn’t require deep pockets. And if you’re a tax investor, wholesaling might be the perfect strategy to add to your toolkit for flipping leads, building capital, or simply making more out of distressed property lists.
In this crash course, we’re going to break down wholesaling basics—especially with a tax investor’s lens—so you walk away with clarity, direction, and hopefully, a few lightbulb moments.
What Is Real Estate Wholesaling (And Why It Works for Tax Investors)?
Let’s start at the beginning. Wholesaling in real estate is when you find a motivated seller, get a property under contract, and then assign that contract to an end buyer—usually a rehabber, landlord, or another investor. Your profit comes from the difference between the price you agreed on with the seller and what the end buyer pays you.
You’re not buying the property yourself. You’re acting more like the middleman who connects a deal.
Here’s why this works especially well for tax lien and deed investors:
- You’re already trained to find distressed or undervalued properties.
- You’ve likely built relationships with county offices or other distressed property data sources.
- You can wholesale properties before the redemption period ends, or shortly after acquiring a deed.
Wholesaling is all about recognizing value and connecting people. And that’s a skill many tax investors already have.
How the Wholesaling Process Works (Step-by-Step)
The process isn’t complicated, but it does involve strategy and hustle. Here’s a step-by-step look at a typical wholesale deal:
Step 1: Find a Motivated Seller
This is often the hardest and most important part. Tax delinquent properties are gold mines for finding distressed sellers. You can:
- Pull tax delinquent lists from your county.
- Use skip tracing to find contact information.
- Send direct mail, make calls, or even knock on doors.
The key? Find someone who wants to sell and is okay with an as-is cash offer.
Step 2: Get the Property Under Contract
Once you have a seller on the hook, you’ll use a purchase agreement to get the property under contract. Make sure your contract includes:
- The right to assign the contract
- A short inspection period (so you can back out if needed)
- A reasonable price that leaves room for your end buyer to profit
Step 3: Market the Deal to Cash Buyers
Now it’s time to sell the deal. If you’re a tax investor, you probably know some cash buyers already. If not, start building a list using:
- Local REIA groups
- Facebook real estate groups
- Craigslist and PropStream
- Driving for dollars and networking
Send out the details of your deal and set a deadline for offers.
Step 4: Assign the Contract
Once you find a buyer, you’ll assign your original purchase contract to them for a fee—usually $5,000 to $15,000 depending on the deal. You’ll use an “Assignment of Contract” form and get paid at closing.
Wholesaling vs Tax Lien Investing
| Feature | Wholesaling | Tax Lien Investing |
| Requires Capital | Very little (marketing costs only) | Usually yes (to buy liens or deeds) |
| Time to Profit | Fast (7–30 days) | Slow (can take months/years) |
| Risk Level | Low (contract-based) | Medium (depends on redemption/auction) |
| Skill Needed | Negotiation, networking | Research, patience |
| Exit Strategy | Assign to buyer | Wait for redemption or take property |
How Tax Investors Can Integrate Wholesaling Into Their Strategy
Let’s say you’re already attending tax deed auctions or researching liens—how can you mix wholesaling into what you’re doing?
Here are a few creative strategies:
Wholesale Tax-Deed Leads
Often, you’ll come across great leads but don’t want to invest in them yourself. You can wholesale those by:
- Contacting the owner before the auction
- Offering a quick cash sale
- Assigning the contract to another investor
Build a Buyer’s List from Auction Attendees
People who attend tax sales are often serious buyers. Network with them, collect emails and phone numbers, and let them know you come across deals. When you find one, they might be your next buyer.
Use Wholesaling to Fund Tax Purchases
If you’re short on capital to buy liens or deeds, use wholesaling to raise quick cash. A few wholesaling deals can generate enough to build your tax investing war chest.
Mistakes to Avoid When Wholesaling as a Tax Investor
Everyone makes mistakes starting out, but wholesaling comes with a few legal and practical landmines. Here’s what to avoid:
Not Knowing Your Local Laws
Some states require a real estate license to wholesale legally. Always check your state laws and use proper contracts.
Overpricing Your Deal
If your end buyer can’t make money, the deal won’t move. Make sure there’s enough room for your buyer’s profit, holding costs, and repairs.
Weak or Sloppy Contracts
Use clear, legally reviewed contracts with assignment language. Don’t rely on generic templates from online forums.
Neglecting the Follow-Up
Follow up with sellers. Follow up with buyers. Follow up with title companies. Wholesaling is a people game—drop the ball and someone else will close the deal.
FAQs About Wholesaling for Tax Investors
Is wholesaling legal in all states?
Wholesaling is legal in most states, but some require you to hold a real estate license if you’re consistently assigning contracts. Check with your state’s real estate commission.
Do I need a lot of money to start wholesaling?
Nope. You’ll need a small budget for marketing (like mailers or skip tracing), but you don’t need thousands to get started.
Can I wholesale a property that’s about to go to tax auction?
Yes, but act fast. Contact the owner before the auction date and be clear about timelines. It’s tricky but possible.
What’s a fair assignment fee?
Assignment fees typically range from $5,000 to $15,000 depending on the deal. The more value you bring to the table, the more you can justify a higher fee.
How do I find buyers as a beginner?
Start with Facebook groups, Craigslist, and local real estate meetups. Even driving neighborhoods and collecting contact info from “We Buy Houses” signs can work.
Conclusion: Is Wholesaling Worth It for Tax Investors?
If you’re already a tax lien or tax deed investor, wholesaling is a no-brainer to add to your arsenal. You already know how to sniff out distressed properties and navigate the public records maze. Wholesaling just takes that knowledge one step further—helping you profit from deals you don’t want (or can’t afford) to keep.
It can also be your stepping stone. Many full-time investors started as wholesalers. Whether your goal is cash flow, capital growth, or long-term property ownership, wholesaling is a tool that helps you get there faster.
So if you’ve been sitting on the sidelines wondering how to dive into real estate—or if you’re already in the game and want to level up—this crash course is your invitation. Start small, stay ethical, and keep learning.