Wholesaling Vs Investment ?

Question

I have a question for wholesalers regarding profit splits. I recently partnered with one who pays me per closed deal — last week he closed 5 deals and I received 40% of the profit. My role is to provide the leads, and I usually receive 35%–50% per closed deal depends on the assignment fees. I also cover most of the expenses for generating those leads: cold callers, lists, dialers, skip tracing, and tools.

All of my leads are off-market and from motivated sellers across several states. Do you think this percentage split is fair, given that I’m funding the lead generation process? In your experience, do partners usually share the costs of lead generation, or do they simply split profits? or half cost and half profit thing ?

What I’ve noticed is that serious wholesalers understand this is an investment. The ROI is huge if you know what you’re doing. The ones who work with us on percentage-only deals usually start after trying our standard lead packages for 3 months, seeing the quality, and then scaling higher. On the other hand, many new or non-serious wholesalers expect free leads or free trials, which makes no sense in real business. We focus on scaling to hundreds of high-quality leads monthly for investors who value consistency and growth.

Danielle Clark · Answer

@Martin Adams From my experience, the split really comes down to who is taking the deal from lead to close. If one side is generating leads and the other is handling acquisitions, contract execution, and dispo, the structure should reflect that level of execution and risk.

50/50 works when both sides are actively involved across the entire deal. Otherwise, it typically shifts toward the side that’s actually converting and carrying the deal through closing, or fees are layered on top depending on how the marketing is structured and the actual deal for the end buyer.

Danielle Clark · Answer

One thing I always look at in these structures is how cost, risk, and compensation are aligned.

Clarity between a true JV vs. a lead service vs. a hybrid model is key,  otherwise it can get difficult to scale profitably. Also, keeping the overall cost basis low is important so the end buyer can still make the numbers work.

At the end of the day, it really comes down to structuring deals in a way that works for everyone involved.

Martin Adams · Answer

i agree with you , does it sound great if for first month both partner split the cost of the lead generation (Cold callers , tools , dialers , Lists ) as a trail so each partner see what the other side is capable of doing and decide weather to continue or not or lets say 50/50 Split of the assignment fees while we as generating lead company cover the full cost of generating ?