How much to pay wholesaler?

Question

Hello BP,

I could use the expertise of the BP community.  I wanted to know if there is a common number or rule of thumb when an investor is purchasing a property from a wholesaler.  I understand that wholesalers try to target their purchase of a distressed property at 70% of ARV minus repair costs.  But what would an investor want to pay from the wholesaler?  Thanks in advance.

Alan G. · Answer

@James Baker

Don’t worry about how much they make, worry about whether it’s a good deal for you or not. I’ve purchased many properties from wholesalers and even know they made a killing, I also got an amazing deal. Yes, I’m happy to have them make 15k if I’m getting a home run at the same time.

Mark Rocka · Answer

@Alan G., you nailed it. There’s no reason to ask a wholesaler what their profit margin is. Either the numbers work or they don’t. Would we want renters to ask what our profit margins are?

John Thedford · Answer

This shows they are predators and not providing a service to sellers.

Cole Raiford · Answer

@James Baker there is no rule of thumb for this. Their profit depends on a lot of factors and it varies.

James Baker · Answer

Thanks for the responses.  I am not concerned with how much money the wholesaler made off of a deal.  That is their business.  What I was asking is, is there a max percentage of ARV to pay a wholesaler as a rule of thumb?  Just as wholesalers use the 70% of ARV formula.  I don't care if they make a million bucks off of me.  I just do not want to over pay for a house from a wholesaler.

John Thedford · Answer

Not a dime if they are skirting laws. Most are FRAUDS and SCAMMERS.

Matthew Paul · Answer

As little as possible

How much to pay wholesaler?

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