Also, if you enter into a contract with a seller without both the ability (funds) and intent to actually buy it, you could be sued for a tort called "fraud in the inducement".The 100% legal way to wholesale is to actually close on the property and only then start to market it.  

@Damien Christian   I could see a PM puffing  if you had a 50 or 100 home portfolio you were thinking about switching PM and hiring them on.I am aware of one instance were an partnership was splitting up one partner hired PM to triage the portfolio and the PM came back with what I suspect was a rosier than reality report which induced the partner to do the deal, and there has been some struggles for the new owner..

In addition, if you put a property under contract without both the intent and the ability to close on it, you could be charged with "fraud in the inducement".

Banks are very aggressive about artificially induced (meaning fix up not time) equity.  

Pledged Asset Mortgages A pledged-asset mortgage is an asset you own and use as collateral to induce a lender to grant a loan.

The loan part can be seen as an inducement to have you agree to the partnership by providing a low cost, easily accessible debt component.

Inflation-induced debt destruction, though, takes many years to play out.3) Your tenant is paying down the loan for you.4) Rents will rise with inflation, putting you in a better cash flow position over time.As one of my mentors says "Most people feel foolish when buying rental properties" because in the short run, there is very little if any cash flow to justify the problems that come up.

So, I would say the best cash flow markets tend to be in midwest/south markets where appreciation is not as "wealth-inducing".. 

How does this protect you from renter induced damage?

I believe that you'll find that selling contracts is still interpreted as marketing a property that you do not own - which will require a real estate license.Also, if you put a property under contract without both the intent and ability to close on it, you could face a lawsuit for "fraud in the inducement", because you convinced a seller to sign a contract that you had no intention to see through to the completion promised.The LEGAL way to wholesale is to close on the property first, then market and sell it.