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Updated almost 7 years ago on . Most recent reply
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End Investor buyer profit margin
I have tried looking all over biggerpockets but most people are only looking to find out how much their wholesale profit should be. In my opinion, a wholesalers profit should be determined last in the MAO formula when concluding if a deal is worthy.
However, I want to know how much profit margin a wholesaler should typically leave an end investor buyer?
Is it normal for a wholesaler to only leave this 30% difference for the Investor buyer or should wholesalers leave more.
Is the difference sufficient enough deriving from the Maximum allowable offer for the end buyer?
I understand the 70% multiplier differs between areas but that doesn't address if the percentage is enough!
Example: 100k ARV For simplicity the example property is owned free & clear.
20k Rehab
____ Wholesale profit
(70% x ARV) - REHAB - wholesaler profit = Max offer
(70% x 100k) - 20k- 10k= 40k
Again is it ok to flip to end buyer at 40K in this example or is it cutting it to thin?