# Wholesale profit question

My question is, can you make a 5 figure profit from a wholesale? And how do you know how much you should receive for the deal. Can someone give me an example including where your profit comes from exactly.

Any info is GREATLY appreciated.
THANKS!

I think you can absolutely!!

Let’s do the math, you find a house that is about 50% of FMV or ARV.
For simplicity we’ll say that the house is worth \$75,000.

So you get it under contract for 37,500 or less, (or even 42,000 or less) -

You call up you’re buyer’s list & tell them you have a 75,000 house for them that you will give up for 52,000 -

If you have it for 37,500 that equals 14,500 in profit to you. & the buyer still has it @ 70% FMV
If you have it for 42,000 that equals 10,000 in profit to you, & the buyer still has it @ 70% FMV

For me I could even eat a couple thousand if the house needs 15%+2000.00 worth of repairs, that way the deal still gets done & I still make a lot of money for not very much time.

Later,

DSCWMitchell

ok so basically you the the difference of what you sold it to the rehabber for and the price you got it for. is this a universal understanding? like is it known to all parties that you will receive that amount without saying anything? or do you have to tell them that is the amount you want for the assignment. and also a question about the contract with the seller. do you have to give earnest money or can you really just give about 20 dollars to bind the contract? sorry for so many questions but you guys are really helping me out here ;D

ok so basically you the the difference of what you sold it to the rehabber for and the price you got it for. is this a universal understanding?

***Yes

like is it known to all parties that you will receive that amount without saying anything?
or do you have to tell them that is the amount you want for the assignment.

***Unless you want to double close. That way the investor wouldn’t really know how much exactly I got the property for. Although, I think the easiest way is to negotiate a fair assessment fee and then assign the contract.

and also a question about the contract with the seller. do you have to give earnest money or can you really just give about 20 dollars to bind the contract?

***I normally put down about \$100 to make them happy sometimes they want more- The most I ever put down was \$1000 but you would normally get the investor to reemburse you for that.