Wholesale in real estate usually refers to the cheap sale of "junker" homes to rehabbers looking to fix and flip those homes. Pretty house wholesale is the same basic principle applied to much nicer properties. Obviously, you cannot just go out in the market and buy a great property, and then turn around and sell it at a discount (you would be broke in your first day on the job). However, the subject-to market does provide a way to do this without risking too much (if any) of your own money, and none of your own credit.

Purchasing a home subject to its existing financial structure is arguably the best way to buy any property. As stated above, it requires very little money, and absolutely no credit (since the financing remains in the name of the original owner). However, one thing a subject-to purchase must include in order to be profitable is equity for profit on the back end, and some monthly cash flow. Often, an investor will get excited after having found a potential subject-to deal, but will then be disappointed to discover a lack of equity or cash flow attached to the property. Most of the time, the investor will simply walk away.

Instead of dropping the deal altogether, consider pretty house wholesale for subject-to purchases which lack enough equity or cash flow. This basically puts you in position as a middle-man. You purchase the home from the defaulting owner, and then find a retailer purchaser who you can entice to buy the home using none of their own credit. It is not easy to get a seller to come on board with this idea, because although they are probably desperate to be out of the home and away from the mortgage payments, wholesaling provides no guarantee that the new owner will continue to make mortgage payments (as opposed to subject-to purchases, where that condition is agreed upon). Instead, you will probably have to convince the seller that the buyer you find will have been very carefully screened for credit and payment history, and you can personally guarantee that they will make the payments.

Once the seller agrees, you must quickly find a new buyer (which should not be difficult, considering they are purchasing a subject-to home, not as a business endeavor, but to live in). This requires no credit on the part of the new buyer, and most likely it will require very little money down. This is where the pretty house wholesaler (you) stands to make a profit: you are relieving a desperate home-owner from crippling debt (i.e. getting a nice home very cheap), and selling that nice home back at a great deal to a retail buyer of normal demand. Somewhere in that process, the investor can work his own profit into the equation. This profit, which can be enormous, will almost invariably be better than having passed on the original no-equity, subject-to purchase.

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