How to pay out a caller/ wholesaling partnership

Question

Hi! I have someone that I am looking to work out a partnership with, their main role is to make calls, I trust this person and they are not just a VA that's just banging out calls but more so someone that understands everything and knows how to have genuine conversations and book appointments. My question is do any of you have any ideas on how to pay them out and what split makes sense for someone that will sit at home make calls and book appointments? I do not want to pay them hourly and want to do commission based after a deal closes. Im also thinking about a commission ladder of some sort.  Any insight would be greatly appreciated!

David Ramirez · Answer

Your partner has to be licensed to receive a commission from a transaction. You could establish a bonus based on the revenue of your company. You are better off creating an entity where he/she owns a percentage of it. And still, I wouldn't recommend that!

Trent Dues · Answer

You could establish a lower hourly wage for their effort in securing deals, and incentivize getting deals closed by promising x amount of the final release be paid to them from title the day the property closes. So if your release fee is $10k, for each deal that successfully closes, your partner would walk away with $4k, you with $6k, or however you decide to split the release.

Andrew Bosco · Answer

This is a finicky road. For my more experienced reps - I pay them a % of the commission if it closes with no hourly fee. That's a motivator for many and it has paid me well and my caller well. Have an open dialogue with the wholesaler partner.

Eliott Elias · Answer

You can structure an hourly, commission, or hybrid pay structure. It sounds like they are the cold caller, and acquisitions agent. 20% of the wholesale fee is fair.

Michal Kasza · Answer

Thank you Andrew! That is definitely the road I am taking. They have expressed to me that is the payout structure they are interested in.

Michal Kasza · Answer

This is super interesting and a great structure! Not sure it would work for this partnership but I will deff keep this in mind when I bring on more people. Thank you!!

Michal Kasza · Answer

Thank you! I had no idea they couldn't receive a commission. I don't think I want to make them a partner as that would mean they would be getting a percentage of the whole company and we agree they will only get paid out on the ones they were involved with.

Michal Kasza · Answer

Hi Lydia, this is really helpful information and something for me to think about. They don't want to get paid hourly, they are not interested in that. This is definitely something that they want to partner with me on so I am going to really dive deep into brainstorming something commission based as that is what they expressed to me are interested in. Also, they are actually a licensed agent in another state, I also thought you didn't need a license to wholesale real estate. I guess a commission payout is different? Thank you again for your response.

Lydia R. · Answer

I know you said you dont want to pay them hourly and Im guessing its because thats not within the budget, but remember that if they are only getting paid based on deals that you close it can be unfair to them because they are putting in the work and if you cant close the deals then essentially they are doing your grunt work for free. I think to make it fair for them you need a hybrid of hourly pay and some kind of percentage or bonus for closed deals. The other option is to create an LLC and make them a part owner (like 10%) but that opens a whole other can of worms. My best advice would be some kind of 30-60 day trial period to make sure the 2 of you can work together well. I have learned the hard way that just because you are friends with someone, or even in a relationship with someone, doesnt mean that you will work together effectively. A trial period will give you both the opportunity to see if you work well together and it also makes it easy for either one of you or both of you to decide this isnt the right fit and walk away without any financial consequences or hard feelings.

Look into the legality of paying a commission because I dont think you can legally pay him a commission based salary because he is not a licensed agent.

How to pay out a caller/ wholesaling partnership

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