How do wholesalers make money on Seller Finance deals?

2 Replies

It's easy to understand why seller finance deals are hard to find. Interest rates are crazy low, and most sellers don't want to carry paper. However, I know that these deals are still out there. I believe wholesalers are going to be my best option for finding these deals. But, how do they make their assignment fee? 

Originally posted by @Joshua Hollandsworth :

It's easy to understand why seller finance deals are hard to find. Interest rates are crazy low, and most sellers don't want to carry paper. However, I know that these deals are still out there. I believe wholesalers are going to be my best option for finding these deals. But, how do they make their assignment fee? 

Wrong question. The correct question is how do wholesalers make ANY money?

Answer; they don't. Guys like me spend $100,000's per year make sure they can't even come close to competing.

Next question. How do Real Estate Agents make money on seller financed deals?

Answer; we make sure that the buyers down payment is enough to cover closing costs & our commission. Usually closing costs & commissions are going to come in around 10% of the purchase price. So the way deals like this get structured is going to be with AT LEAST 15%-20% down. More likely 25%-50% down.

James Wise, Real Estate Agent in OH (#2015001161)
216-661-6633

James is right - they make their money with your down payment.  

When I buy an off-market SF deal solo, I usually put 10-15% down.  When a realtor is involved, my avg DP increases to 22%.  Fine with me really because the rates are higher and terms shorter in general.

The good news for the wholesaler is that us B&Hers will pay more than 70% minus rehab. I'll happily pay 92% of FMV for a long-term SF buy and hold in decent shape.

Just plan on coming up with a good sized down payment if a realtor or wholesaler sources you a seller-financed deal @Joshua Hollandsworth  

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