My client funded seven deals last year without me and paid a 3 percent sourcing fee to a guy who found him two of them.

That math lands differently when it's sitting right in front of you. Two deals, call it $210k each, 3 percent per deal works out to roughly $6,300 per deal, so somewhere around $12,600 total. Ten days of active work per deal, no holding costs, no repair surprises, no carrying the property through a slow market.

The thing worth understanding before you have that follow-up conversation with your client is how sourcing agreements are typically structured. In the service model, you are not buying the property yourself and flipping the contract. You are being paid a fee, sometimes called an acquisition fee or sourcing fee, to find a deal, get it under contract on the client's behalf, or bring it to them in a form they can close. The fee structure, who signs what, and whether you need a real estate license to do this in your state all vary, and that last part matters enough that you should ask a real estate attorney in your state before you build anything around it.

What you did not ask, but probably should before that call, is whether this was a one-off or whether your client has an ongoing pipeline target. A capitalized buyer who closed five deals in a year and is sourcing two more through a third party is not dabbling. If he has a number in mind for this year, that changes what the conversation is worth to you.

The strategy guide for wholesaling as a service covers the service-side framing in more detail, including the regulatory environment and what makes operators in this space durable. Worth reading before you talk to him.

What is your client's target for deals this year, if he has mentioned one?

The sourcer kept control because the contract was assignable and in his name, not the buyer's.

What you want to ask before you see that agreement is whether the sourcer assigned the contract to your client or did a double close, because those two mechanics produce completely different tax treatment for the sourcer, different closing cost exposure, and different levels of control if the deal goes sideways before funding. Assignment means the sourcer's equitable interest transferred and he collected an assignment fee that looks like ordinary income with no acquisition cost basis. Double close means he briefly held title, which changes his liability profile and usually requires transactional funding for the middle leg. Three percent of 200k is 6k per deal, so 12k total, and if those were assignments the sourcer's only real cost was time, a small earnest money deposit, and whatever he spent building his relationship in Cumberland County. The question underneath the one you are asking is how the sourcer got those two sellers before your client's direct mail did, because your client was already running a campaign in the same geography. That answer probably tells you more about what the service is actually worth than the fee structure does.

Was your client aware the sourcer was working Cumberland County, or did those deals surface because the sourcer happened to be upstream on a lead your client had not reached yet?

What I want to know is whether the sourcer brought the contract already signed or handed your client a lead and let him execute it, because that distinction is the whole ballgame legally and economically.

If he was double-closing or assigning, 3 percent on $200k is $6k a side and you can do that in a week if the pipeline is there. If he was just referring and your client's attorney papered the purchase directly, that sourcing fee might not even hold up in Tennessee without a license depending on how it was structured.

Did your client say whether this guy does it full time or whether those two were opportunistic?