What is the average payout for a wholesale deal?

Question

I'm interested in using wholesaling as the first step in my real estate investment strategy, and I'm wondering what your average wholesale deal brings in terms of income.

Do you always look for the same payout (i.e. "I always shoot for $5K per deal"), or a percentage of the value ("I shoot for 5% of the deal as the wholesale payment")?

Chris Piper · Answer

I have heard recently that the average wholesale fee is $15,000. Obviously that will vary by market. In my area(Northern Indiana), entry level houses go for $50,000-$75,000. This makes $15,000 difficult in most cases for me. I always charge 10% of the ARV of each property as my wholesale fee. If I can get more out of a deal and still sell a property for no more than 70 cents on the dollar, I will. Sometimes you have to accept less than you expected just to get a deal finished and move on. Basically, it's up to you to decide how much you want to make on each deal. I like using a percentage, so I can factor that into my formula I use which in turn let's me know what my maximum purchase price is.

Breshawn Hawthorne · Answer

depends on the market also depends on the seller each deal is different.

Amelia Posely · Answer

Wow!! If you consider the time, marketing, calling people, and etc that's really good.

Aaron Mazzrillo · Answer

No such thing as an average wholesale fee. You might wholesale and over a period of time, come up with an average for all your deals, but if you are not wholesaling for as much as you can get on every deal, you are leaving piles of money on the table.

Of course, there is an exception and that would be to pass along a little juicier deal to a good buyer. Maybe he had some problems on the last deal you sold him. Maybe she has bought a few and performs well so you 'bonus' her.

Scott Anthony · Answer

I agree with "Get as much as you can, while still providing a good deal to the buyer". I usually get 5k, but im in a much smaller market. If the deal can tolerate it, I go higher than that.

Zach Schaar · Answer

Honestly it varies on the market you're in as well as the sellers and the buyers you've acquired! I do agree with the above post, you can make any amount really.

Have fun! The money will come.

Alison M. · Answer

I shoot for as much as I can get away with while still making a good deal for the end buyer.  I've had as little as $5k and as much as $40k.  One woman at our REIA club got a $100k wholesale fee recently - really!