Hi I was wondering how much should I assign a contract with a property worth $600,000
Ummm…a “$600k” deal doesn’t mean it’s 600k in equity. Assignments are based on actual profit and what the two parties think is fair. We don’t have enough details here. What do you mean by “deal”?
- You mean you’re selling it for $600k or it’s worth $600k?
- What are repair costs? realistic plus 10-20% extra
- How fast is turnaround/days on the market?
I mean a wholesale deal. You know with a arv times .7 - repairs - your profit 4 wholesaling(what is safe to say 30- 40,000 for assigns)=mao off 600,000.
or do you guys just kick up the price to what ever you want and do a double close. if yes please explain.
Normally its 10% of the equity they are getting.
If the house is worth 600k and youre selling it for 590, then you get 1k…not that anyone would go for that slim of a deal.
Interesting. I had never heard of assignment fee based on a percentage of equity. I guess 10%sounds about right. I was curious if anybody else bases their assignment fee on a different percentage
10% sounds good but I was wondering if any has pulled a close with out the buyer knowing how much you got it for so your profits a lot larger. I heard a guy from one of the free audios from reiclub and he was talking about ex- arv 500,000 and going for 300,000 no repairs raising the price to 400,000 to an end consumer not and investor. so the profit will be 100,000 instead of 10% off 200g’s. Would a title company handle all that for you in los angeles, Ca if any of you guy are from here? thanks
How else would you do it? A flat rate? If you did youd either be cutting yourself short on bigger deals or making smaller deals even less attractive to the buyer.
We do flat rates based on what we think we can get and still leave money in the deal. Fees are typically 5-10k, but can be as low as 2500 on a skinny deal. The main objective is to have the other investor make money. If we can consistently make 2500-10k on each deal, we don’t mind “leaving money on the table” because the other investor will thank us and use us again.
Now, if there’s really a 100k of equity in a deal after all fees are taken into account, a $25k assignment seems fair.
I’m assigning 1 for approx $3k on a skinny deal. Do I care? Not really. It’s $ I didn’t have before.
I have never wholesaled a deal based on a percentage but on what the market will bear.
Not what “seems fair” . I choose not to let my buyer pick my “fee”. Marketing your property from a fee standpoint will cost you. Marketing from “what the market will bear” will make you money. Try marketing the property at a low price, let the investor make you an offer and most likely your profit will be higher than a “flat fee or seems fair or a percentage” Advertise slightly below retail and become “the motivated seller”, get low balled and sell. You will make more this way.