Wholesale Assignment Fee Math: Price the Deal So Your Buyer Still Wins

Wholesaling has one piece of math that separates people who assign contracts from people who collect them: your maximum offer is your end buyer's maximum offer, minus your fee. Not the seller's number minus your fee. Not ARV times a percentage you saw in a video. The buyer's number — because the buyer is the one writing the check that makes your fee real.

Price against anything else and you get the classic failure: a contract nobody on your list will take, a fee that shrinks in renegotiation, and a seller you have to walk away from. Here's the formula that prevents it.

The double-MAO formula

Work backward from the person who funds the deal:

1. Buyer's MAO = ARV − Rehab − Holding − Buying costs − Selling costs − Financing − Buyer's required profit

2. Your MAO (the contract price) = Buyer's MAO − Your assignment fee

Two calculations, run in that order, every time. The first one is the same full MAO analysis a flipper runs — you're just running it as your buyer, with a serious buyer's cost structure and profit requirement, not with fantasy inputs that make your fee possible. The second is subtraction.

A worked example

Suppose ARV is $250,000 and the realistic rehab is $40,000. A credible flipper in your market carries roughly: holding $7,500, buying costs $3,500, selling costs at 7% of ARV $17,500, hard-money cost $7,000, and requires $30,000 profit to get out of bed.

Buyer's MAO = 250,000 − 40,000 − 7,500 − 3,500 − 17,500 − 7,000 − 30,000 = $144,500

You want a $10,000 assignment fee.

Your maximum contract price = 144,500 − 10,000 = $134,500

Get it under contract at $134,500 or less and the deal works for everyone: the seller gets a real closing, the buyer gets a deal at their number, and your fee survives inspection by anyone with a calculator. Get it at $142,000 and you're marketing a $2,500 fee while calling it $10,000 — your buyers will do this math for you, less politely.

Where wholesalers actually blow the math

• Optimistic ARV. Every dollar of ARV inflation flows straight into a contract price no buyer will honor. Comp it like the buyer will (they will). See the ARV guide.
• Fantasy rehab numbers. "Needs about $25k" on a $45k scope doesn't lower the rehab — it lowers your credibility and then your fee.
• Ignoring the buyer's costs and profit. The buyer's commissions, carry, and money cost aren't your problem until they are — at the assignment table.
• Working the 70% rule without knowing what's in it. Fine as a screen; on cheap houses it produces contract prices that leave nothing for anyone. (Full breakdown: the 70% rule guide.)
• Setting the fee first. The deal's spread sets the maximum fee, not your goal for the month. Thin deal, thin fee — or no contract.

Assignment contracts and disclosure requirements vary by state. Get your paperwork from an attorney.

Frequently asked questions

How much should a wholesale assignment fee be?

Whatever the spread supports after your end buyer's full MAO — there's no standard number. The fee is the difference between the buyer's maximum and your contract price; deep-discount contracts support large fees, thin ones don't.

What's the wholesaling formula for an offer?

Two steps: compute your end buyer's MAO (ARV minus rehab, holding, buying, selling, financing, and the buyer's profit), then subtract your intended assignment fee. The result is the most you can put the property under contract for.

Why won't cash buyers take my contract?

Usually because the contract price doesn't leave room for their numbers — an inflated ARV, an understated rehab, or a fee carved from profit they were never going to concede. Re-run the buyer's MAO with honest inputs and the answer is normally right there.

Do wholesalers use the 70% rule?

As a fast screen, sometimes — but the contract price must come from the buyer's full MAO minus your fee. The 70% shortcut ignores the buyer's actual financing and breaks hardest on the low-priced houses wholesalers most often work.