What do the top 10% of wholesalers earn yearly? ballpark?

Question

What do top performing wholesalers in big markets like New York, Los Angeles, Chicago and Houston earn a year? I am curious how much is a realistic expectation or is there a ceiling? If so what happens when you reach that ceiling? What is the next step after that is reached usually?

William T. · Answer

@NICK YAMBURGER What is your object for becoming a wholesaler?  If it is just to earn money and make a career out of it, that can be tough starting out.  As a wholesaler myself, the only reason why I am doing this so I can buy my first property.  The more money I raise as a wholesaler, the more properties I can buy in cash.  So think about your short and long term strategy for real estate investing.  You can learn a lot on on BP and obtain a lot of answers to the question you want to ask. Last thing, read the beginners guide to get started.

Joel Owens · Answer

I think it's important that the numbers stated here sound like gross revenue.

If a wholesaler does 20 deals and 10k a piece there is a massive marketing campaign behind that and a ton of substantial costs incurred monthly. Some wholesalers have  partner so that gets split in half as well.

So the 200k total in revenue gets whittled down quite substantially I would imagine.

As for a broker/agent it depends on residential or commercial and your split.

If you are selling commercial and close a 3 million property at 2.5% and keep it all that is 75,000. If you double end it you can make 150,000.

Now if you are selling residential houses at 50,000 making 1,500 at 3% commission and then having to split with your broker on top of that then the 10k wholesale fee per deal sounds much more attractive. The two are really so different from each other.

I do mailers myself but to apartment owners and triple net leasing owners for properties for  my clients (buyers) to purchase.

Sam Craven · Answer

Agents make 3% on a deal, the typical wholesale margin is far greater than 3%.

It should also be understood that if you are in the right geographic area, good at sourcing leads, negotiating and building relationships, $10k on a wholesale can be the minimum.

half of our business is wholesales on the long running average.  The rest are flips with far better margins.

NICK YAMBURGER · Answer

Thanks everyone for the response, I guess the reason I posed this question is because I was wondering why more wholesalers don't become agents? It seems like a high powered agent could earn way more without the amount of financial risk. However after reading the posts, I see the next level would be something along the lines of buying a portfolio of distressed properties. I guess even private equity firms are essentially wholesalers themselves.

John Fossetti · Answer

Welcome to BP.  As stated, the top 10% are mostly companies that purchase tapes of bank owned properties as well as buying Notes.  Technically they become lenders, similar to what Chris has mentioned.

An average wholesaler makes $5,000-$10,000 per deal and I don't think there is a ceiling, I believe it is skies the limit.

Jon Klaus · Answer

And welcome to BiggerPockets, Nick!

Chris Winterhalter · Answer

@NICK YAMBURGER

Welcome to BP!  Income levels for wholesalers can range wildly however can go well into the 7 figures for highly successful companies with large teams.  Some of the largest wholesalers over the last 5 years have been the companies that have been able to successfully buy REO's in bulk.  It takes a well funded company to be able to do this along with lots of expertise.  You hear of a lot of people starting out in wholesaling however in my opinion it takes almost more expertise to be a wholesaler (successful) than it does a buy and hold single family rehabber.

I would say the natural progression for successful wholesaling operations is to move to hard money lending.  The two compliment each other well.  And as a wholesaler and lender you have to understand values extremely well.  If I am buying for cash flow and for 5+ years I don't have to worry if my current value is off by 5%.  However in a wholesale deal 5% can be the margin that makes or breaks the deal.

I'm not sure what you are looking to gain from your question however I can tell you along with many other members that wholesaling is simple but not easy.  It takes capital, persistence, and the ability to constantly generate and convert leads.  It also takes market expertise and a strong network and team.  Good luck!

Jon Klaus · Answer

I'd think that there are some doing 20-30 deals a year at an average of $10k per. This might be the top 5%. At that level, some probably close on a few deals and wholetail or rehab for bigger paydays.

And I'd define wholesalers as those actually doing deals, not those who are planning to but never have.

What do you think Sam Craven and Jerry Puckett?

What do the top 10% of wholesalers earn yearly? ballpark?

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