Four part-timers want me to run dispo for their contracts. Flat fee or a cut?

Before the split, settle the paper. Three separate things are getting blurred in your post.

First, who is the assignor of record. If their contract has an anti-assignment clause or a named-buyer-only clause, none of this works the way anyone expects and you find out at the title company. Read their purchase agreement, the actual one they use, not the one they say they use.

Second, your relationship to them. A per-deal joint venture agreement signed before each contract moves is cleaner than a standing arrangement, because a standing arrangement starts to look like an ongoing business you're a principal in. Which matters for your third question.

Third, the licensing point. Whether getting paid to find a buyer for someone else's contract triggers a real estate license requirement depends entirely on your state's statute and how the fee is characterized, and a few states have added specific wholesaling provisions in the last couple of years. That's a question for an attorney in your state, which you already booked, so I'll leave it.

On the flat fee, one clause I'd add either way: who eats the cost if the deal needs a double close instead of an assignment. That's title fees plus a second set of closing costs and it can be $3,000 on a $120k house. On a $7,500 median fee that's not a rounding error.

I've run a service business with subcontractors for five years and your $500 per contract handed over is the part I'd fight for, harder than the 40%.

The reason is behavior. If they pay nothing to hand you a contract, they hand you everything, including the ones they know are overpriced. You become the place bad contracts go to die and your close rate looks terrible, which they will then use to renegotiate your cut down. A small non-refundable amount per handoff makes them price the thing honestly before they send it, because it costs them.

We learned this with call intake. The moment we charged a small diagnostic fee, the junk calls dropped 60% and our conversion on what was left doubled. Same mechanism.

Also, four part timers, one of them will be flaky. Decide now what happens when someone goes dark mid-transaction.

Run the two structures against their actual volume rather than the split percentage.

Say they hand you 24 contracts a year, which is the ones they currently lose plus a few. Assume you close 55% of what they hand you, which is optimistic given they already failed on them once.

Percentage: 13 closings x $7,500 median x 40% = $39,000. Flat: 13 x $2,500 = $32,500, plus 24 x $500 = $12,000, total $44,500.

So your flat structure wins at their median. It stops winning if the fee mix runs high. At a $12,000 average fee the percentage pays $62,400 against your $44,500. Your $22k outlier tells me the tail matters here, and you're handing them the tail.

The assumption doing all the work is that 55%. If you close 35% the flat structure wins by a lot more, because the $500 per handoff carries you. If you close 75% you should be on the percentage and you should also be asking why they couldn't move houses you can move in a week.

I'd ask for their contract-to-close data before signing anything. If they can't produce it for 14 closings, that's the finding.

Two things in your post are separable and you're treating them as one decision.

The compensation structure is a volume and variance question, and sextant has the arithmetic right. A flat per-deal fee plus a handoff payment shifts variance onto them and pays you for work regardless of outcome. A percentage pays you for outcomes and gives you the upside on the tail. Which one is better depends on the fee distribution, and with a $22k outlier in a set of 14, the distribution is the thing you don't know yet. Fourteen closings is not enough to estimate a tail. A hybrid, smaller flat plus a smaller percentage above a fee threshold, gets you paid for showing up and keeps you in the outliers.

The buyer list question is different and it doesn't resolve with a number. In a network arrangement the shared buyer list is the asset that makes the whole thing work, and the member who contributes it is contributing the scarcest input. Deal flow is replaceable. Twelve rehabbers who close in your zips are not. If the agreement doesn't give you control over which contracts reach those twelve, you're renting out the asset without controlling how it gets used.

On licensing, whether being paid to source an end buyer for another party's contract requires a real estate license depends on your state's statute and how your compensation is structured, and several states have tightened wholesaling rules recently. Your attorney call is the right step and the answer should be in writing before the first handoff.

One more term to fix in advance: who owns a buyer relationship that originated on your list but closed on their contract.

I'm new to this, so flag anything obvious I've missed, but the thing that jumped out is that you framed it as your list versus their contracts and the deal as written treats those as equal contributions.

They have four people generating 2 to 4 contracts a month and losing a third. That's the part they can rebuild. If you leave, they find another dispo person eventually. If they leave, you still have 12 buyers who answer the phone and you still buy renovations. The arrangement is worth more to them than to you and the terms should say so.

So the concrete thing I'd do before picking flat or percentage: ask each of the four to write down, separately, the last five contracts they couldn't move and why. Don't accept a summary, get the five houses and the reason. You'll learn in ten minutes whether the problem is pricing or condition. You may also learn they only had three buyers to call. If it's pricing, no buyer list on earth fixes it and you're being hired to absorb their mistakes. If it's that they had nobody to call, then your list is the entire business and 40% is low.

And I'd put a cap on it. Six contracts, then you both look at the numbers again. Six months of being the place bad contracts go, as thatch put it, and you'll have trained your best buyers to ignore you.