Just wondering what are the typical fees that wholesalers and/or bird dogs charge their cash buyers? I am from the Hudson Valley, NY but any advice would be helpful! Thank you!
I only add a few thousand $ to my wholesale deals. I want my buyers to get the most profits possible and for them to come back for more.
Stephen Anderson thanks for the tip! That's definitely a good way to do business.
I would rather make a few thousand for taking emails, placing ads and making phone calls all day long. That way I can do more deals and close multiple deals a month.
Be very careful using the term "Bird-Dog." As I understand it, this is when a buyer is brought to a seller on a property. However, you need a RE License to bring buyers to a seller.
Wholesaling is different because you are contracting for yourself to buy the property, then selling your stake in that contract to a third party in exchange for a small fee.
I know it seems like semantics, but I think it is an important distinction to make as you can get into trouble for "bird-dogging" without a license.
Ashlee, good question as this has legal and ethical flavors to it.
What professional service do you provide, is it line with a Realtor or an attorney or a doctor?
I won't go into economics or why service providers charge similar fees from an economic, ethical and legal view but your services are in line with a real estate agent, at the very most, you shouldn't expect much more than a commission would be.
Those that claim to take bigger chunks are gouging either the seller or the buyer, stealing equity generally and this is unethical dealing, period! Yes, they are more con artist than a real estate operator.
And, the reason your services are less valued is because wholesaling with assigned contracts is on the shady area of contracting, it can be illegal, so your basis of providing the same service as an agent is less reliable and questionable dealing.
Your fee is constrained by the quality of services and abilities, the skill level required, education, legal aspects and fair dealing.
If you want to stay out of trouble, make more without being on the service provider side in the business then learn how to take title and sell as an owner! That can be done easily with very little or no money! Stay away from the gurus and contract flippers and get educated in real estate, not in deal making.
Unlicensed brokering has become the favorite play of the game. Don't believe all the hype, etc. Many of these unlicensed brokers will NEVER make any real money. If your goal is money, monthly income, freedom, I suggest following successful people to learn how they achieved it. Following a bunch of yahoos operating as unlicensed brokers probably won't lead to success.
in a market where units are worth 30k finished per unit, I usually do 3-6k/unit for buyers, down to 2-4 if multiple time buyers.
For my MLS clients (no wholesale fee) I do let them know that I can offer additional non realtor services on a private service basis, as needed.
Your fee should be as much as the market will bear. It may be $1,000 up to $40,000. As long as your investor is happy with their purchase price, it shouldn't matter if you paid $1 for the property or $1 less than what you're selling it for. I work extremely hard to source my deals. 2 full time VA's, a Sales Manager and a full time office manager/transaction coordinator. I'm mailing 12,000-15,000 pieces of mail per month in one market and about to add my second. I've never bought a house or sold a house to someone who didn't agree to the price. Make your money when you can because it can be a roller coaster. Best of luck.
Nothing is typical everything is negotiable in this business. A person's value and leverage will dictate what they charge.