If I were going to calculate total return, I'd take cashflow and add back the amount that went to principle and divide that by my investment, but I'm curious to see how they came up with a 14% total return.

I feel that doing it on the front end is more ethical, and on the back end can be seen more as not negotiating in good faith.  

They have a note that they paid full par value for so the principle return is tax free (all of the gain from that was deferred in the 1031) only taxable portion of this note is the interest that comes in.  

I've been a wholesaler for over 10 years and have also done some flipping and would say that running things ethically will cause you to lose a bit here and there, but ultimately will build your reputation and therefore your business as you gain buyers who love making deals with you and people with whom there is mutual trust.

This means your year one mortgage payment is $25,332 ($15,827 interest, $9,505 Principle) leaving you with $14,668 in cash flow or a pre tax cash on cash return of 14.6%.

Sounds like you're being snagged because no one qualified to teach, legal and ethical wholesaling is out there that also is current on lease options, pretty sure of that.

I'm listing a property in Florida and I had a question that I hope someone here might be able to answer. I don't live in Florida, so I interviewed some RE Agents and two them stood out to me. Can I hire them both? Is ...

@Erica Burton There are some ethical questions that come up when an agent wholesales.

I guess my question is what would the ethical thing to do be?

It seems hard to find an ethical contractor even for my own home repairs and improvement, so trying to manage a rehab remotely frightens me a bit.