What a wholesale offer actually has to cover
Your offer is not just what you are willing to pay. It is what the end buyer can pay minus the fee you need to make.
The end buyer — usually a flipper or a landlord — underwrites the property to their own maximum allowable offer based on the after-repair value, rehab, financing, and their target margin. That buyer MAO is the true ceiling on the deal.
Your offer to the seller has to sit below that ceiling by at least the size of your assignment fee. If your contract price plus your fee exceeds what the buyer can pay, the deal will not assign.
The formula, worked backward
Wholesalers price from the buyer’s numbers inward, not from the seller’s asking price outward.
Start with a defensible ARV, then apply the end buyer’s MAO math: ARV, less rehab, less their margin and costs. That gives you the most a buyer will realistically pay for the contract.
Subtract your assignment fee from that buyer MAO, and you have your maximum offer to the seller. If the seller will take that number or less, you have a deal. If they will not, the spread is not there — and no amount of optimism creates it.
- Buyer MAO = ARV − rehab − buyer’s margin and costs.
- Your offer to seller = Buyer MAO − your assignment fee.
- If the seller’s price is above that, walk or renegotiate.
Sizing the assignment fee realistically
The fee has to be worth your effort without pricing the buyer out of the deal.
On a tight, lower-priced deal, a smaller fee that moves fast beats a large fee that kills the buyer’s spread and leaves you holding a contract nobody wants. On a larger deal with more meat on the bone, the fee can scale up.
The test is simple: after your fee, does the end buyer still hit their required return? If yes, the fee is defensible. If not, you are the reason the deal does not close.
The mistakes that make a contract unassignable
Most stuck wholesale contracts trace back to a handful of avoidable errors at the offer stage.
The biggest is anchoring to a retail ARV or thin comps, which inflates the ceiling and leaves no real spread. The second is underestimating rehab, which the end buyer will not do — they will price the true scope and pass.
The third is stacking a fat fee onto an already-tight deal. Discipline at the offer stage is what makes your contracts easy to move to a buyer’s list.
Your reputation is the spread
Buyers come back to wholesalers whose deals actually pencil. Pricing every contract so the end buyer wins is how you build a buyer list that clears your inventory fast.