Off-market real estate. You’ve heard the term, but what is it? Is it FSBO (For Sale By Owner) on Zillow? What are investors doing with this, and how is there money to be made? Industry estimates indicate that roughly 38% to 40% of residential sales occur off-market. So, what is this other segment of the housing market doing?
Today, I want to break down what “off-market” real estate means, what wholesaling is, how it’s profitable, and how anyone can get into it. You know, the “Who, What, When, Why, and Where,” if you will. Come with me on a little journey to the dark side, or the “Black Market” of real estate, if you will.
Traditionally, in the US, when someone sells a house, they find a realtor, look at comps, list the house, have showings, accept a contract, negotiate, and then finally close, pay everyone, and move on. These are the houses you’ll see on Zillow, Realtor.com, Trulia, etc. These are “On-Market” properties, or properties listed on the MLS. While investors can find deals here, the real deals and volume are happening before these houses ever make it to the market.
Off-market properties are properties that people are buying and selling without listing them online, like on Zillow or Realtor.com. The properties are often distressed or investment properties with a tenant living in them. Selling properties off-market is actually a huge blessing to many homeowners. It often allows sellers to avoid situations like foreclosure, bankruptcy, or being stuck with a home they simply cannot take care of anymore.
This is where wholesalers come in. You know who they are already, but chances are you have the wrong idea of who they are. Ever get those Middle Eastern calls asking, “Do you want to sell your house at 123 Sesame?” The “spammers,” as a lot of people think of them. What these people are doing is called wholesaling, particularly acquisitions, but that’s for another day.
A wholesaler finds properties where the owners may be distressed or have high equity, and they call the owners to see if they want to sell their property. If the owner is interested, the wholesaler can make an offer on their house. Typically, they are buying houses around 50% of the ARV, or “After Repair Value.” Every house has an ARV. That means the house’s price if it were in its absolute best, updated condition.
Say the wholesaler, “Sam,” calls the owner and asks if they want to sell their house. The homeowner is interested in an offer, and Sam decides to make an offer on the house. Sam looks at comps to find the ARV for the house and then runs a simple formula to calculate his MAO, or Maximum Allowable Offer. Typically, this number is around 50% to 70% of the ARV, minus repairs. It’s a discount.
Why would sellers sell for a discount? Sometimes the property is inherited, and they just need it gone. It’s too much work, and they can’t afford the repairs. Sometimes the homeowner is facing a foreclosure auction in the next two weeks. In those cases, the wholesaler can actually stop the sale, save their credit, and help them walk away from the house with a little cash in their pocket.
Once the wholesaler has the property under contract, they begin marketing it to investors as a “contract for assignment.” Instead of selling the house itself, which would be brokering real estate and require a license, they are selling the contract to buy the house. There is already a contract on the house, and they are selling that contract to an end buyer.
Say the wholesaler, Sam, gets the property under contract for $50,000. All the documents go to the title company like normal, but then Sam starts sending the property out to investors: “Cute 3-bed, 2-bath home on Sesame Street. Needs rehab work.”
Now Sam has an investor who wants to flip the house, so they call Sam and make him an offer. The investor offers $80,000 to buy the assignment contract, or a document assigning the original sale contract to a new buyer.
Here is where the magic happens. Because Sam ran his numbers right, he knows he can get an investor to buy the contract on the property for $80,000, and that buyer pays all the closing costs, etc. When closing day arrives, the seller and the new buyer go to closing. Sam simply waits to be paid. The seller gets the $50,000 Sam offered. But wait, the buyer brought $80,000. What happens to that? Well, the buyer brings $80,000, which funds the $50,000 purchase price, leaving $30,000 remaining. That $30,000 then goes to Sam as an “assignment” fee. It’s like a realtor, but for selling contracts, not houses. A $30,000 fee isn’t unusual, and these closings are often fast — within two weeks.
Sam spent $0 out of pocket to make $30,000 in two weeks. This is wholesaling. This happens across the entire US and globally, all the time. According to a 2026 Real Estate Bees survey of more than 1,000 wholesalers, as reported by Real Estate Skills, the average assignment fee is about $13,000 nationwide and $25,000 in St. Louis.
Thanksgiving is coming, and if you’re an investor, you know what that means. Trying to explain to everyone exactly what you are doing. People are confused. They think maybe you’re a realtor? They don’t get it. Maybe someone in your family will even read this before the holidays, when you try to explain, “What exactly do you do again?” and you’ll be saved five extra minutes of explaining. Who knows! But what we do know is that up to 40% of real estate is moving off-market, so we certainly aren’t alone! Maybe over time people will read enough articles like this to help expand the general public's understanding of this.
Supporting Source
Martinez, Alex. “Wholesale Real Estate Salary: How Much Do Wholesalers Really Make?” Real Estate Skills, updated July 16, 2026. https://www.realestateskills.com/blog/wholesale-salary. Reports survey data from Real Estate Bees (2026; 1,000+ professional wholesalers).
