Does the $75k assignment fee number actually happen or is that a course pitch

Question

I've done a handful of assignments in the $6k to $12k range and I keep running into the same ceiling: my buyers are all small landlords and flippers with maybe $300k of cash each. Then I read the luxury numbers, $75k to $150k on one distressed estate, and it either sounds like the obvious next step or like something someone made up to sell a program.

What I actually don't understand is what changes on my side. Same contract, same assignment, just a bigger number in the price box? Or is there something structurally different about a $2.4m distressed house that makes my process useless?

Rena Guide · Accepted Answer

The mechanics really are the same. You sign a purchase agreement with the seller, that contract gives you an equitable interest, and you assign your position to an end buyer for a fee. Nothing about a $2.4m price changes those steps.

What changes is everything around the steps. Fees in the range you read about are reported in the high-end tier, and the reason they can be that large is arithmetic: a spread that's 4% of value is $12k on a $300k house and $96k on a $2.4m one. So the number isn't invented. It's also rare, because the properties are rare and the buyers are rarer.

That buyer scarcity is the part that will actually break your current process. Your list of small landlords with $300k cash cannot close a $2m purchase, so you'd be starting your buyer side from zero. Finding an end buyer is the hard half of luxury wholesaling, and people who succeed at it usually already know a handful of wealthy investors before they get a contract signed.

Valuation is the other thing that stops being routine. On a $300k house you might have twelve comparable sales within a mile. On a distressed estate you might have three in the county, none of them close in condition, and renovation costs at that level run to numbers that swing your spread badly if you guess. Also worth knowing before you go looking: roughly a dozen states don't make sale prices public at all, so comp data you take for granted in one market may simply not exist in another.

luis_carrera · Answer

The arithmetic point is the one that finally landed for me. 4% of value is 4% of value. I'd been thinking of the fee as a thing you negotiate up rather than a percentage that just gets bigger with the house.

devon_pierce · Answer

I've been building a buyer list for a year and the split is stark. I have maybe 40 people who can do $250k cash and two who might do $1.5m, and both of those two only came from a contractor introduction, not from any list building I did. Cold outreach to people at that level goes nowhere for me.

gregpowell66 · Answer

On the renovation side, the reason your comps get useless is that finish level swings the number more than square footage does. A kitchen in a $400k house is $35k. The same room in a $2.5m house can be $180k because the cabinetry is milled to order and lead times run months. If you price a distressed estate off a per-square-foot renovation figure you carried over from ordinary houses you'll be out by six figures, and that lands on your buyer, who will then not take your next call.

joe_delgado5 · Answer

keystone, the part I'd worry about isn't the fee, it's how long you're on the hook. My assignments close in 12 to 20 days. Everything I've read about the high end suggests inspection periods stretch out because the buyer is doing structural, septic, pool, sometimes environmental. Longer contract means more chances the seller finds another exit and starts looking for a way out of yours.

Rena Expert · Answer

flint's point about timeline is the one that decides whether the fee is real. Luxury end buyers do longer diligence, so your contract has to survive weeks rather than days, and that changes what you negotiate at signing. A short earnest money deposit and a wide-open inspection contingency, which is standard practice in low-price wholesaling, reads as unserious to a seller with a $2m asset and often to their attorney.

So you're usually asked to put up real money. If the deposit at that level is 1% to 2% of price, you're risking $20k to $50k of your own capital on a deal you don't yet have a buyer for. That's the actual barrier, not the sourcing.

On the assignment itself, whether you can assign at all depends on the contract language and on state law, and a number of states have added disclosure or registration requirements around wholesaling that apply regardless of deal size. Confirm how your state treats it with a real estate attorney in that state before you sign anything at this price point, because a large visible transaction is the kind that gets examined.

One thing that goes wrong specifically at this level: your seller is more likely to be represented, and a listing agent who spots an assignment coming may push for a clause barring it or insist on a double close instead. A double close means you actually buy, which means transactional funding and two sets of closing costs and transfer taxes, and transfer taxes vary by state and can be substantial on a $2m sale. That can eat a third of a spread you thought was clean.

Does the $75k assignment fee number actually happen or is that a course pitch

6 replies