There is little limit on what the wholesaler can make, BUT, the deal has to fit the formula for the buyer of the wholesale deal.
REMEMBER: We savvy investors don’t worry about how much our birddogs (wholesalers) are getting paid. Our only concern, as the buyer, is that the deal fits your formula. If the deal fits the formula…BUY IT!
Your wholesaler brings you the deal for $25,000. You’ve established that you can sell a property with an “OWNER FINANCED PRICE” of $57,000. You like the deal but you find out that your wholesaler bought the deal for $10,000 …there’s no way you are going to pay him a $15,000 Profit. Well, here’s what I have to say about that…
“Stop counting other people’s money and get on with making your own!”
You may be astounded at how much some wholesalers make. You’ll also be astounded at what you’ll have to pay extra for a deal when you start forcing your wholesalers and birddogs to hide what they’ve paid for deals. Extra closings cost money….extra title policies, closing costs, filing fees, document prep, etc., etc.
What you should be paying attention to is this…
If the amount of profit your wholesaler is making make you upset, then get off your butt and find the deals yourself ! Figure out what your wholesaler is doing, and start stealing houses for yourself! If you can’t figure out what they are doing to find such great deals, YOU are under educated. I can guarantee you that your wholesaler has simply found a less traveled path, focused on their niche and spends all their time and effort doing exactly one thing, over and over and over again.
If the deal FITS your formula…buy it! …and stop adding up the money the wholesaler is making. The key here is that the sales price TO YOU works FOR YOU.
There is an endless line of wholesalers that DO NOT care about their client list. They inflate the values, down play the remodeling expenses and, in essence, hope you do not do your homework so they can sell you this loser. They especially prey on Newbies who trust them and their numbers.
These wholesalers are BS artists! …and they are a dime a dozen. As soon as you recognize this trend, cross them off YOUR LIST.
When YOU go to wholesale a property: Make sure it is a TRUE WHOLESALE. Don’t over inflate the values. Make sure your rehab costs are as accurate as you can get them. Leave your buyer room to make a great profit. If you’ll be consistent and give a great deal when you go to wholesale a property, you’ll never be waiting for an accepted contract long. Buyers will run to your deals.
REMEMBER: Savvy investors know BS when they smell it. Don’t get on that list!