Wholetailing: when it beats a wholesale
By Josh MillerUpdated 4 min readWholetailing beats a wholesale when the house needs little work and retail buyers will pay well above what an investor would: you buy it, clean it up, and list it on the MLS instead of assigning the contract. It takes cash or a loan to buy, holding costs, and an agent's commission, so it only pays when the gap between investor and retail price is bigger than those costs.
Some houses you put under contract aren't really investor deals. They're nearly move-in ready, and a retail buyer with a mortgage would pay a lot more than a flipper. Wholetailing captures that gap.
How it works
- Buy the house below market, with cash or a short-term loan.
- Do light work: clean out, paint, carpet, small repairs.
- List it on the MLS for retail buyers.
When it beats a wholesale
| Wholesale | Wholetail | |
|---|---|---|
| Your purchase price | $200,000 (contract) | $200,000 |
| Investor would pay | $220,000 | |
| Retail buyer would pay, after light work | $275,000 | |
| Light repairs | -$10,000 | |
| Holding: loan, taxes, insurance, 3 months | -$7,000 | |
| Selling: commission and closing | -$17,000 | |
| Closing costs to buy | -$4,000 | |
| What you make | $20,000 | $37,000 |
Here the wholetail earns more. Change two things, more repairs and a smaller retail gap, and the wholesale wins with no cash at risk.
When to wholesale instead
- The house needs real renovation. That's a flipper's deal.
- You don't have the cash or a loan to buy it.
- The retail market in that neighborhood is slow.
- The gap between investor and retail price is smaller than your costs.
Check the neighborhood's real prices
Retail sales of fixed-up houses near this one tell you the retail price. Investor purchases tell you the wholesale price. Both are in the deed records. See recent investor deals and flips in your county.
Questions investors ask
What is wholetailing in real estate?
Buying a house below market, doing light work like cleaning, paint or carpet, and listing it to retail buyers on the MLS, instead of wholesaling it to an investor or fully renovating it.
Is wholetailing better than wholesaling?
When the house is close to move-in ready and retail buyers will pay much more than investors. It earns more per deal but ties up cash and takes longer.
How much money do you need to wholetail?
The purchase price, or a loan for it, plus light repairs, a few months of holding costs and the selling commission.
How long does a wholetail take?
Typically a few weeks of cleanup and then however long it takes to sell on the market, often 2 to 4 months in all.