What to pay a partner/cold caller who is helping me call through lists to start out?

Question

So i have a friend who lives far out of the area who is looking to help launch a my wholesaling company. I want to start out solidifying my ability to source and control my lead gen and to feed my future efforts of flipping and holding. That said, what would you pay or split profits with someone if they find a lead that I end of securing a contract with and eventually wholesale it and profit? I want to be fair, but I also want to be wise.

They will be: calling through list to find and then pre-qualify leads.

I will be: Owner of company, closing the qualified leads on top of cold calling myself, property inspections, marketing prep for cash buyers, closing cash buyers, seeing through the process of closing with title company, and all the small supportive measures that go along with that, having a tight sales process and flow, automating and every other small thing that comes up.

I appreciate everyones insight and wisdom.

Josh Stout · Answer

@Aaron Faulk gotcha, gotcha...There are a lot of unknown specifics for someone outside to be able to advise on how much the split should be or what your transaction volume might look like. I'll start from the end and work backwards...how many deals you're closing depends on how many people your calling, offers you're making and your ability to close and dispo the deals. Without knowing your lists and time commitment, it's difficult to advise what you might want to split with them in terms of deal percentage. What I will say is to always look at it from their point of view; does the split seem like they will feel adequately compensated for their time? That's how I would look at figuring this out. Will they be working 40 hours a week or 4? Are you trying to close a couple deals a week, or a couple per quarter? It all depends on what you're doing and how well you're doing it. At the end of the day, a percentage split is an awesome way to do it. I would just pay attention to what you guys expect and then base it off of what you think would be fair to your friend. Especially if they want to grow with you as you mentioned.

Aaron Faulk · Answer

@Josh Stout it is a work friend of the past two years whose standards I trust and who sees value in what I'm doing. Therefor they want to connect with it and grow with it etc. i am not looking to give up ownership or anything of that sort. It will be a straight commission on closes for the time being. No base salary etc. His role is I will give him lists to cold call, and he can prequalify any leads, same as outsourcing to a VA oversees. Difference is starting out, this is 0 investment and with someone whose standards I trust and whose feedback I can use to further mold my processes etc. That said, once I get my first assignment, what kind of percentage range would you split the profits? How many deals should we expect to hang? to help project what he may be able to take home. Any other insights you may have. Also, clarity is the exact reason I'm approaching this.

Josh Stout · Answer

Hey @Aaron FaulkThere are endless ways to structure arrangements like this and they depend on a zillion unknowns, including what everyone wants out of the arrangement. Are you helping your friend out? Does the friend want to grow with you? Is the friend just doing you a solid? Especially since it's a friend of yours, I think the most important thing is to be very candid with one another about wants, needs and expectations. That being said, here are some ways I would consider structuring it depending on the answers to the questions above. Pay them as a cold caller. Simple goals, simple arrangement. Pay/incentivize them as a cold caller. Incentive could be for leads generated, deals closed, etc. Lots of options. This aligns interest and could increase motivation. Partner split closed deals without pay up front. (flat fee or percentage) Essentially a "commission only" sales option. Great option when liquidity is too tight to pay up front, but not everyone is able to make that sacrifice in terms of working for free on the front end. There really are endless options and the best one needs to be the best one for YOUR specific situation. Doing business with friends adds a layer of complexity but when done well is a really rewarding experience. Hope that helps a bit....feel free to reach out with any other questions. Good luck out there!