Somebody told me my 40 renovation contacts are a dispo business

I don't think you're competing with them. You're bringing them inventory. A flipper who can't find deals is happy to hear from anyone who has one, and if you're also the guy who renovates it, that's not a conflict, that's convenient.

The risk I'd worry about is the reverse. If you sell one of them a bad deal, you lose the buyer and the renovation client in the same phone call. One basket, like you said.

I'm brand new so take this as a question. Does the buyer know you're getting half of a 9k fee? Or is that invisible to them? Seems like it would matter for the relationship if they found out later.

@rigging on an assignment the buyer usually sees the assignment fee because it shows up in the paperwork and often on the settlement statement. How much detail they see varies by how the deal is papered and by state practice, so it's not a universal. But the idea that the fee is a secret is mostly wrong.

@harrow the thing your wholesaler friend said that I'd focus on is losing one or two deals a month for lack of a buyer. That's 9k to 18k a month walking out the door on his side. If that's real, he needs you a lot more than you need him, and 50/50 might not be the top of his range. Ask him what he's currently paying anyone else to move deals.

On the closing mechanics, it's less mysterious than it sounds. Assignment agreement between him and the buyer, buyer's earnest money goes to whatever escrow holder the contract names, you're chasing the buyer for proof of funds and a signature and making sure they actually show up. The work is chasing, not law.

Reading this as an outsider to the active side, the part that stands out is that your 40 contacts have never been asked to buy anything from you. A list of people who like you is not the same as a list of people who will wire earnest money in 48 hours. I'd call five of them and ask what their buy box is before agreeing to any split. If four say "send me anything under 200k with good bones" you have something. If four say "I'm full through spring" you have 40 names and no business.

The conflict you're describing mostly isn't one, and the concentration risk you named is. Both can be true and the second is the one to manage.

On the economics, your friend's number is the useful part. Four deals a month at a 9k average, one or two lost to disposition failure. Call it 13.5k a month of fee he currently cannot convert. At 50/50 you'd capture roughly 4,500 to 9,000 a month on deals that would otherwise die, and he keeps the rest of something he was getting zero on. That math holds only if his lost deals are lost for the reason he says. If they're lost because the contract price leaves no margin, no buyer network fixes them and you'll burn calls to your renovation clients on deals that don't work. Underwrite two of the ones he lost last month before you agree to anything. If the numbers were dead on arrival, his problem is acquisition and the split is irrelevant.

On the buyer side through closing, the tasks are proof of funds, executed assignment, earnest money delivered to the escrow holder named in the contract, and pushing the buyer to close on time. Assignment mechanics and what appears on the settlement statement vary by state, and some states restrict assignment marketing outright, so confirm how it works where you operate with a closing attorney or title officer licensed there.

The concentration point is real. If your renovation revenue and your fee revenue come from the same 40 people, one bad deal costs you twice. The usual answer is to keep adding buyers you have no other relationship with, so a soured deal is contained.

Speed is the whole edge in this model. Deals that move in under 72 hours consistently hold better spreads than deals that sit. Your 40 names are only worth something if they answer fast.