Community · November 13, 2026
Learning hub: how investors buy and sell houses and land
There are six common ways to make money from a house or a lot you find below market value. Each one needs different money, takes a different time and carries different risks. Here is how each works, in plain words.
Key points
- Profit in real estate is set on the day you buy. If the numbers work only in a perfect market, the deal is too thin.
- A wholesale deal needs almost no money but a list of real cash buyers. A flip needs the most money and the most time.
- Arizona requires a written notice from wholesale buyers and sellers of homes with fewer than five units before a contract is signed.
- In Florida, a person who markets someone else's property for pay needs a real estate license. Market your contract, never the house as if you own it.
- An FHA buyer cannot get a loan on a house resold 90 days or less after the seller bought it.
Start with the buy
Every way of investing in this guide starts the same way: you find a property you can buy below what it is worth. Most of the time that means a house that needs work, an owner who must sell soon, or a lot nobody has looked at in years. The price you agree on that day decides almost everything that follows.
Before you sign, you need three numbers. The first is what the property is worth today as it is. The second is what it would be worth after repairs, which investors call the after repair value. The third is the full cost of the repairs, from a contractor's written bid. From those numbers you work out the most you can pay and still make a profit after every cost.
Pick your way out of the deal before you sign, and pick a second way in case the first fails. A house you planned to flip may have to be sold as is if repairs cost more than the bid. A lot you planned to resell may take months longer than you hoped. If you cannot name a second way out, the risk of a loss is high.
1. Wholesale: selling the contract
In a wholesale deal you sign a contract to buy a property, then you sell your place in that contract to another buyer before closing. That sale is called an assignment. You never own the property. The end buyer closes with the owner at the title company, pays the owner's price plus your assignment fee, and both amounts show on the closing statement.
Wholesale needs little money, only the earnest money deposit on the contract. What it does need is a list of cash buyers who close when they say they will. Lenders often will not fund a purchase on an assigned contract, so most wholesale buyers pay cash. Check that your buyers have proof of funds before you assign the contract to them.
Two rules matter. In Arizona, a wholesale buyer of a home with fewer than five units must tell the seller in writing, before the contract is binding, that it is a wholesale buyer. If it does not, the seller may cancel before closing without penalty and keep the earnest money. In Florida, marketing a property for someone else for pay needs a license, so a wholesaler markets the contract, never the house as if it were theirs.
2. Wholetail: buy, clean, sell
A wholetail sits between wholesale and a flip. You buy the property and take title, do only light work such as cleaning and paint, then sell it on the open market, usually through a licensed agent. The work is small, so the house can be back on the market within weeks.
You need money for the purchase, the closing costs, the light work and a few months of holding costs: loan payments, taxes, insurance and utilities. Get the insurance quote before you sign. In Florida, the age of the roof and the flood zone can make a policy hard to get or costly.
Count the days from your own closing. If you resell 90 days or less after you bought, a buyer using an FHA loan cannot buy from you, because that property is not eligible for an FHA-insured loan. From day 91 to day 180, if your price is 100 percent or more above what you paid, the buyer's lender must get a second appraisal.
3. Flip: buy, renovate, sell
A flip is a full renovation. You buy, repair the house to the level of the best recent sales nearby, and sell. It can earn the most of any way in this guide, and it carries the most risk. A flip often takes three to six months, and longer when permits or contractors run late.
The money needed is the largest: the down payment, the full repair budget, six months of holding costs, and extra for repairs that cost more than planned. Fixed-price bids from licensed contractors, payment only for finished work, and a lien waiver with every payment protect you from the most common losses.
In a falling market, time costs money. If prices drop each month while you renovate, the sale price at the end is lower than the one you planned. Close permits before you list, because the buyer's inspector and lender will check them.
4. Rental: buy, repair, rent, refinance
Some investors keep the house as a rental. A common plan is to buy below value, repair, rent it out, then refinance with a new loan based on the repaired value and take some of the money back out. Investors call this BRRRR: buy, rehab, rent, refinance, repeat.
After the refinance, the rent must at least cover the full monthly payment: loan, taxes, insurance and any association fees. Investors measure this as the rent divided by that payment, called the debt service coverage ratio. BIMINIO keeps a rental only at 1.0 or more, and prefers small buildings of two to four units.
Check rental rules before you buy. Some homeowners associations ban rentals, and some ban only short stays. A ban on short stays still allows a yearly lease.
5. Novation: selling for the owner
In a novation, the owner keeps the title. A written agreement lets the investor prepare the house and sell it on the market. The owner gets the net price agreed in advance, and the investor earns the difference between the sale price and that net price, after the costs of the sale.
Novation needs little purchase money, only a small budget to prepare the house. It suits an owner with equity and some time, whose house would sell well on the market after cleaning and small repairs.
Licensing is the main risk. Florida law says a person may not operate as a broker or sales associate without a valid and current active license, and breaking that rule is a third degree felony. A novation needs a licensed agent and a lawyer's review in the state where the house is.
6. Double close: buying and reselling on one day
In a double close, the investor buys the property from the owner and sells it to the end buyer back to back, often at the same title company on the same day. It is common with land. The investor holds title for a short time, so the end buyer gets a deed from the investor.
There are two closings, so there are two sets of closing costs. In Florida, the deed tax is 70 cents on each $100 of the price, and it is due on each deed. On a double close that means two deeds and two taxes, which must fit inside the profit.
Compare the six ways
The table below sums up each way in one line. Use it to see which ones fit the money and the time you have.
| Way | Money needed | Usual time |
|---|---|---|
| Wholesale | Earnest money only | Days to a few weeks |
| Wholetail | Purchase, light work, holding costs | A few months |
| Flip | Purchase, full repairs, holding costs | Three to six months or more |
| Rental (BRRRR) | Purchase and repairs until the refinance | Years |
| Novation | A small budget to prepare the house | The time it takes to sell |
| Double close | Two sets of closing costs | One day of closings |
Your team, before your first deal
Every way above works better with the same small team in each state: a title company that knows investor deals, a real estate lawyer, a tax adviser, a lender and licensed contractors. Ask the title company early whether it accepts assignments and double closings, because not all do.
Keep written records of every deal: what you paid, what you spent, the days it took and what you sold for. After a few deals those numbers tell you which ways of investing work for you and which do not.