Whoesale Fee on an $875K Property

[Michael Evans]

I am working with a wholesale company who was able to enter into a purchase agreement for a property in Sierra Madre, CA for $875K without actually giving an earnest money check (seller is asking for 3% in earnest money, or $26,250). The wholesaler company and I are marketing the deal to investors (needs at least $137K in rehab costs and will have an ARV of $1.2 - $1.3 million on the low side). One option is to sell the contract. How much should we ask for:

• $25K on the back-end of the purchase paid through escrow, or
• $10K on the front-end outside of escrow

We have extended this deal twice without having to put up the earnest money, but time is running out.  I have one investor who is interested, but they want the whole deal (rather than be an equity partner in a joint venture to purchase, rehab and sell the property).  So I need to know what's a reasonable price to ask for (I don't normally wholesale).

God Bless You!