How much should a wholesaler profit when selling to an investor?

[Alex Klimenko]

Hi guys,

So I recently came across an amazing deal which I got under contract. I ran the comps and they are amazing, I am about 55k-60k under market value on this property. A house across the street with the same exact floor plan, and year built, sold for 230k in January. This property is currently not on the MLS, and how I got my hands on it is for another thread. All in all its an amazing deal and only needs light work (carpets changed in bedrooms, paint inside, and maybe upgrade the kitchen sink and toilets. 10k-12k max, I did construction and remodeling work for a while so I know my prices).

I want to flip this property to a potential investor, in fact I already have a meeting next week with an interested candidate. I dont want the property for myself because a) I have too much going on right now (I co-own another business) and b) its about 2hrs away from where I live. I would be much happier flipping it to an investor who would pay me a commission, make a decent amount of money, and have him come out making really good money and wanting to work with me in the future.

My question is, what is the "norm" profit on wholesaling a deal to an investor? I have the property under contract for 168k, when its valued at 230k with minimum work needed. I would think its completely fair for me to ask for 10k, and hand it over to him for 178k. At that rate after closing, he would be right around 180-182ish, and at 195k with a 13k investment in remodeling. That still puts him at $35k +/- profit if he sells. Can someone give me an idea if I have my numbers somewhat right? I just dont want him falling out of his chair when I say 10k (he knows how much I got it under contract for). 

Thanks!

[Jason D.]

Not to burst your bubble, but that's not as goid of a deal as you may think. If I have $195k in a flip, it better be worth more than $250k or I missed the mark somewhere. At $230k, after closing, break even is about $210k so $15k is not enough profit for me to buy that house. Not to mention the $10-12k rehab could easily become $20k, leaving me with nothing.