How to Calculate Real Estate Wholesaling Assignment Fee Profit

Key Takeaways

The average wholesale assignment fee in U.S. residential deals runs between $5,000 and $20,000 per contract, but fees above $15,000 require precise ARV documentation to survive buyer scrutiny.
Wholesalers who skip earnest money and transactional funding costs routinely overstate net profit by $1,200 to $3,500 per deal.
Calculate Maximum Allowable Offer first, then subtract your target assignment fee to set your contract price, not the other way around.
Tool: Run your deal numbers with the CalcMoney Property Calculator →

Compare Real Mortgage Rates

Credible shows real, prequalified mortgage rates from multiple lenders side by side in minutes.

Interactive Calculator

Full screen

Loading Mortgage Calculator

calcmoney.io/calculators/mortgageOpen full screen

The Core Formula: Maximum Allowable Offer and Assignment Fee

Your net assignment fee equals the contract price you assign minus the price you locked up with the seller, minus every cost you incur between those two events. Written as plain text:

Net Assignment Fee = Buyer's Contract Price - Seller's Contract Price - Wholesaler's Transaction Costs

Before you can set either contract price, you need the After Repair Value and the buyer's required equity margin. Most experienced fix-and-flip investors in the U.S. apply the 70% rule: they will not pay more than 70% of ARV minus estimated repairs. That ceiling is your Maximum Allowable Offer to the buyer, which sets your assignment price ceiling.

MAO (to end buyer) = (ARV x 0.70) - Estimated Repair Costs

Your seller contract price must sit below that figure by at least your target assignment fee, plus your own costs.

Seller Contract Price = MAO - Target Assignment Fee - Wholesaler Costs

Run this sequence in order. Wholesalers who start with the seller's asking price and work forward routinely price themselves out of every deal.

Worked Example 1: Standard Single-Family Wholesale in a Mid-Tier Market

A distressed single-family home in Columbus, Ohio carries a realistic ARV of $210,000. The end buyer estimates $38,000 in repairs. Earnest money deposited with the title company: $2,500. Transactional funding fee (for a double close, if needed): $850. Title company assignment fee: $350.

Step 1. Calculate the buyer's MAO.

(210,000 x 0.70) - 38,000 = 147,000 - 38,000 = $109,000

That is the most a competent fix-and-flip investor will pay for this contract. Your assignment price to the buyer must sit at or below $109,000.

Step 2. Set the assignment price.

You price the assignment at $109,000.

Step 3. Set the seller contract price.

Target assignment fee: $12,000. Wholesaler costs: $2,500 + $850 + $350 = $3,700.

Seller Contract Price = 109,000 - 12,000 - 3,700 = $93,300

Step 4. Confirm net profit.

Assignment Fee Collected: $109,000 - $93,300 = $15,700. Subtract wholesaler costs of $3,700. Net profit: $12,000.

The $15,700 gross spread looks attractive. The $3,700 in costs is real money that disappears if you ignore it.

Wholesaler Transaction Costs: The Numbers Most Deals Miss

Four cost categories reduce your gross assignment fee to a net figure. Every wholesale deal should account for all four.

Earnest Money Deposit. Typically $500 to $5,000 depending on purchase price and market. This is at risk if you fail to assign or close. For a $93,300 seller contract, $2,500 is standard.

Transactional Funding. Used in double-close structures where you briefly take title. Lenders charge 1% to 2.5% of the purchase price for 24-to-72-hour bridge money. On a $93,300 A-to-B purchase, a 1% fee equals $933. A 2.5% fee equals $2,332.50.

Title and Closing Fees. Assignment agreements processed through a title company add $250 to $600 in administrative fees. Some states require attorney involvement, which adds $400 to $1,200.

Marketing and Acquisition Costs. If you sourced this deal through direct mail, the average cost per acquired contract in 2024 ran $1,800 to $3,400 per deal based on industry direct-mail benchmarks. Cold-calling and driving for dollars run lower. Divide your monthly marketing spend by deals contracted to get a per-deal acquisition cost. Include it.

Worked Example 2: Higher-Value Assignment in a Competitive Market

A distressed duplex in Nashville, Tennessee shows an ARV of $415,000. Estimated repairs: $62,000. The end buyer applies a slightly tighter 68% rule given market competition.

Step 1. Buyer's MAO at 68%.

(415,000 x 0.68) - 62,000 = 282,200 - 62,000 = $220,200

You negotiate assignment price at $218,500 to give the buyer a small margin and close the deal faster.

Step 2. Seller contract price.

Target assignment fee: $22,000. Wholesaler costs: earnest money $5,000 + transactional funding at 1.5% of $196,500 (seller price estimate) = $2,948 + title fees $550 + direct mail acquisition $2,200 = $10,698.

Seller Contract Price = 218,500 - 22,000 - 10,698 = $185,802

Step 3. Confirm transactional funding on actual seller price.

1.5% of $185,802 = $2,787. Difference of $161 from estimate. Adjust seller contract price up by $161 to $185,963. Round to $185,950 for clean negotiation.

Step 4. Net profit.

Gross spread: $218,500 - $185,950 = $32,550. Subtract costs of $10,537 (adjusted). Net: $22,013.

The deal delivers $22,013 net, not the $32,550 gross that an incomplete analysis would show.

How ARV Accuracy Determines Whether the Deal Survives

An ARV error of 5% on a $210,000 property equals $10,500. That single miscalculation collapses the entire profit margin on a $12,000 fee deal. Use three to five closed comparable sales within 0.5 miles and 90 days. Pull data from the MLS, Zillow's sold tab, or county recorder records. Weight square footage, bed and bath count, and condition. A single outlier sale should never anchor your ARV.

Buyers who discover an inflated ARV after signing your assignment agreement will renegotiate or walk. You lose the deal and your earnest money stays tied up or at risk. Accurate ARV is not a quality-of-life issue. It is the load-bearing number in every wholesale transaction.

Equity Cushion: What the End Buyer Actually Needs

End buyers using hard money loans need 25% to 35% equity at purchase to satisfy their lender's loan-to-value requirements. A buyer using a 70% LTV hard money product on a $210,000 ARV property can borrow a maximum of $147,000. If your assignment price is $109,000 and repairs are $38,000, total project cost equals $147,000, which hits the lender ceiling exactly. Any assignment price above $109,000 forces the buyer to bring additional cash or find a different lender. Your deal dies.

Build the buyer's financing math into your analysis before you set the assignment price. The MAO formula does this automatically. Skipping it does not.

Run Your Wholesale Deal Numbers Before You Make an Offer

Every variable in a wholesale transaction, ARV, repair estimate, buyer equity rule, and transaction costs, interacts. Changing one number shifts every other output. The CalcMoney Property Calculator lets you input your specific ARV, repair budget, equity percentage, and cost structure and see your net assignment fee in real time. Run the numbers before you call the seller, not after you sign the contract.

Results are estimates for informational purposes only. Consult a licensed financial professional before making financial decisions.

Featured Partner

FIDELITY