Since I live in Northern California, I’ve been told not to accept small fees of $5,000 but to ask for between 12 and 15 to $20,000 for assignment fees… most homes run from mid 400’s to 750+ in this area.
Question: How do I calculate my fees to an investor without leaving money on the table? I prefer to use percentages. Should it be a % of the market value of the house or a % of the buying investor’s profit?
Thanks for your help.
Hello,
I have found in assigning deals that you get what you can be it based on percent or flat fee. But really percent has never worked for me. It may also depend on who your flipping to. When I am flipping a deal I usally have one or two guys I flip to and we share alot of the profit.
But when I was new I would simply mark up the cost, lets see, maybe a good rule of thumb might be, allow the rehabber to make 20% profit of the arv sales price. Now if its an extensive rehab they may need to make more. Oh wait you live in cali, yes profits are higher there. but likey no less than 15% of arv would most rehabbers wanna take. Now remember that is gerneral rule of thumb only, here are some variables: if he has a big crew he will make less profit than a small one to three man reabber, depends on area, type of house, extent of rehab needed.
Hope this helps some,
have fun
Bill,
Thanks for the response on my question, hopefully I’ll hear from others out there to get their feedback too. I’m still a little “in the dark” as to what to charge for a signed contract. Still learning!
Thanks again,
Suzanne Barber
You don’t calculate your wholesaling fees. I advise investors to make as much as they can while still leaving profit in the deal for their buyers.
If you buy a home worth $100k for $40k and it needs $20k in work, you can easily assign it for $10k. But if you bought that same house for $20k, you can make $30k. The value of the home after repairs does not matter, its how good of a deal that you pick up that determines what you can get out of it.
Blessings,
Steve
Susan,
for example one I flipped this year got for 60k or so and marked up to 92k making 32k or so. Now I have flipped houses for 1-2k. I also have flipped them for zero, just to prove to the bdog who brought it to me that we can close fast and are real.
It all depends on the deal and the more deals you do the better you will get at this.
have fun