Four months as the dispo half of someone else's wholesale operation, 900 dollars total
Finished this in March and I've had time to look at it properly.
Deal. A wholesaler in my market was drowning on the sell side. He gets contracts, he cannot move them. I took dispo on a 35 percent of net spread basis, no retainer, no floor. I was building a buyer list anyway so I figured the list was the real pay and the checks were a bonus.
What happened over four months. He put 19 properties under contract. I marketed all 19. Six closed. My gross on those six was 900 dollars.
Where it broke, step by step.
Step one, the contracts were priced wrong. He was signing sellers at 82 to 88 percent of ARV on houses needing 40k. There is no buyer at that price in my market and there wasn't one at any point in those four months. Nine of the 19 were dead the day they were signed and I spent about six hours each proving it.
Step two, "net spread" was never defined in our email agreement, which is all we had. He deducted his marketing, his cold caller's commission, and on two files a price reduction he gave the seller to keep the deal alive. Two of my six closings netted out to spreads under 1,200. My 35 percent of that is 420 combined.
Step three, the one good deal, an 1,100 square foot brick ranch in a decent B neighborhood, had a 22k spread. He assigned it to a buyer he already knew, sourced before I came on, and paid me nothing. Under our arrangement that was defensible. I never asked for a clause covering deals I marketed that closed to a house buyer.
What it cost. About 220 hours plus 640 on skip tracing and email tools. I did end up with 210 verified buyer contacts, 40 of whom I'd call real. That has value and it's the only reason this wasn't a total write-off.
What I'd do differently. Underwrite the contracts before agreeing to market them, and reserve the right to decline a file. Define spread as the difference between the seller contract price and the assignment price with no deductions, or price a flat fee instead. And put in writing that any deal I market pays me regardless of where the buyer came from.