Test your knowledge.
15 questions covering every step of the wholesale real estate process. Answer each question, get instant feedback, and see your results at the end.
A new wholesaler signs a purchase contract for a distressed property at a deep discount and immediately begins advertising the house itself on Facebook as 'For Sale by Owner' even though the deed is still in the seller’s name. From a legal-compliance perspective, what is the biggest risk in this behavior?
Wholesalers typically have equitable or contractual interest, not legal title, so advertising the house itself (instead of the assignable contract) can be construed as acting like an unlicensed broker in many jurisdictions.
You put a property under contract with your LLC listed as buyer and the contract does not prohibit assignment. To remain clearly within typical wholesale practice and minimize accusations of brokering without a license, what should you be careful to emphasize when marketing the deal to investors?
Compliance-focused guidance stresses that wholesalers should market their equitable or contractual interest rather than present themselves as selling or listing the property, which would resemble brokerage.
A state has recently tightened its rules around assignment of equitable interests, requiring additional disclosures and, in some cases, a license. As a wholesaler creating a standard operating procedure, what is the most prudent first step before doing more deals there?
Because wholesaling and assignment requirements are state-specific and evolving, authoritative sources strongly recommend working with a local real estate attorney to tailor contracts and disclosures.
A seller asks why you can resell the contract for a profit when you never actually own the property. To give a compliant, accurate answer, what is the best explanation?
Equitable interest means a buyer under contract has a contractual right tied to the property, which in many jurisdictions can be assigned or sold via an assignment of contract if not prohibited by the agreement.
You plan a nationwide SMS campaign to homeowners using a third-party 'motivated seller' list. The leads were collected online through a generic checkbox saying 'partners may contact you.' Under recent FCC interpretations of the TCPA, what is your biggest compliance concern?
New FCC rules close the 'lead generator' loophole by requiring one-to-one prior express written consent for each specific business before telemarketing texts or autodialed calls are sent.
Your cold-calling VA dials a homeowner who is on the National Do Not Call Registry using a power dialer to offer a cash purchase of their home. The owner complains and threatens to sue. Why is this situation particularly risky under TCPA and telemarketing rules?
The TCPA and related telemarketing rules restrict unsolicited sales calls to numbers on the Do Not Call Registry, and violations can carry steep per-call statutory damages, especially with dialers or prerecorded systems.
You want to test SMS follow-up on leads who initially filled out your web form requesting a cash offer and explicitly opted in to text messages from your company. To stay compliant, which practice is the most important?
Recent guidance emphasizes meticulous documentation of consent language and timing as a key part of demonstrating TCPA and telemarketing compliance.
A student asks which outbound strategy is safest from a TCPA perspective if they have limited compliance infrastructure. Which of the following is generally lower risk than mass cold calling or mass texting, assuming local laws are followed?
Traditional direct mail does not fall under TCPA telemarketing restrictions in the same way as autodialed calls or text messages, making it a comparatively safer outbound channel when done properly.
You estimate an ARV of $260,000 and rehab costs of $50,000. Your buyers in this submarket insist on using a 65% rule instead of 70% because they want a bigger margin. If you want a $12,000 assignment fee, what is your Maximum Allowable Offer to the seller?
Investor max is $260,000 × 0.65 = $169,000, minus $50,000 repairs = $119,000; subtracting a $12,000 wholesale fee gives a wholesaler MAO of $107,000, so $106,000 (or lower) is closest and safely under that ceiling.
A property’s ARV is confidently supported at $180,000 using solid sold comps. In a very hot, low-inventory area, your best buyers routinely pay up to 75% ARV minus repairs. If repairs are $30,000 and you want a $10,000 assignment fee, what is the highest price you should target with the seller?
Investor max at 75% is $180,000 × 0.75 = $135,000, minus $30,000 repairs = $105,000; subtracting a $10,000 fee yields a wholesaler MAO of $95,000, so $82,500 or lower leaves healthy spread, whereas $90,000 or $97,500 tighten margins significantly.
When pulling comps to estimate ARV for a two-bedroom bungalow, you find several recent three-bedroom sales nearby at strong prices and two nearly identical two-bedroom sales that are six to nine months old. Which comp set should carry more weight?
Best-practice guidance stresses prioritizing truly similar properties in bed/bath count and type, even if slightly older, rather than relying on mismatched configurations that can distort ARV.
A student insists on using active listings as primary comps because they show higher prices than recent closed sales. Why is this approach dangerous for underwriting MAO?
Guides on the 70 percent rule and ARV warn that relying on seller asking prices instead of closed sales tends to inflate ARV and causes investors to overpay.
During a seller appointment, the owner says, 'I’m worried you’re just going to flip this contract to someone else and back out on me.' What response best balances honesty with maintaining the deal?
Ethical wholesaling and legal commentary emphasize clear disclosure that the buyer holds contractual rights and may bring in partners, while committing that the agreement will be honored if contingencies are satisfied.
You are negotiating with a seller who demands a very short closing timeline and refuses price reductions later. To protect yourself while still moving forward, which contract term is most critical?
Inspection and due diligence clauses are the primary contractual mechanism that allow buyers, including wholesalers, to evaluate the deal and walk away with their deposit if serious issues arise within the agreed timeframe.
A seller objects to your low offer by saying, 'Another investor told me they’d pay full retail after repairs.' You’ve seen the property and know that’s unrealistic. What is the most effective negotiation move?
Strong acquisition practice uses transparent ARV, repair, and MAO math to educate sellers on why a discount is necessary instead of chasing unrealistic promises.
You offer a small earnest money deposit on a distressed property in a tough neighborhood, and the seller pushes back, saying, 'If you’re serious, you should put down 10%.' How can you respond without overexposing yourself?
Investors often negotiate relatively small earnest deposits while emphasizing certainty of closing and clear inspection periods to balance seller confidence with risk management.
You have a property under contract and an investor buyer ready to proceed, but your state’s regulators have warned about wholesalers advertising properties as if they own them. How should you structure your marketing to the investor list?
Regulatory commentary on wholesaling stresses marketing the assignable contract or equitable interest with clear disclosure, instead of representing yourself as the property owner or listing broker.
An end buyer signs your assignment contract and wires a non-refundable assignment deposit, but a week before closing they try to back out, claiming the numbers no longer work. What is the primary document that governs whether you must return their deposit?
It is the assignment contract that sets the rights and remedies between the wholesaler and end buyer, including whether deposits are refundable or forfeited upon default, subject to applicable law.
A retail buyer’s agent contacts you about a deal where you have equitable interest and asks, 'Who actually owns this house, and who is my client buying from?' What is the clearest and most accurate way to describe the transaction?
Equitable-interest explanations clarify that legal title remains with the seller while the wholesaler holds contractual rights, which may be assigned or followed by a double closing.
Your assigned buyer asks why your fee is 15,000 on a deal where their projected profit after rehab is also roughly 15,000. To preserve long-term relationships with serious buyers, what is the best response?
Disposition best practices focus on transparent numbers and win–win relationships, showing how MAO and spreads are calculated and adjusting fees when necessary to keep deals viable for repeat buyers.