Compensating a wholesaler for delivering a rental portfolio?
A local wholesaler presented a few turn-key rental properties for assignment that eventually grew into an opportunity to purchase an entire portfolio (17 properties) directly from an investor. I want to reasonably compensate the wholesaler for delivering the deal, but there will be no cash left on the table at closing. I’m using my SDIRA (all-in) and seller financing to fund the deal. The wholesaler is willing to accept payment over time and/or interested in participating in some sort of partnership for a long-term hold. Any suggestions/ideas on what compensation is reasonable and what type of partnership we should entertain?
Here’s an overview of the deal:
- 17 SFR's originally marketed for $858K ($50.47K/unit average)
- $11.6K/Mo total income ($682/unit/month average)
- Agreed packaged price (as-is) = $632K
- ARV (based on BPOs) = $780K
- Repairs = $35K
While I don’t know how much the wholesaler had the initial properties under contract, I do know that the price we are now negotiating is well below whatever the numbers were. I suspect, however, that the wholesaler could have made $1-2K/property had they sold the properties one at a time.