I am often asked by other real estate investors how much profit can be made in a wholesaling transaction. There are many aspects to determining how much profit can be made on each deal. In one way or another your profit will be determined by one of the 3 items listed below.

The price of the home- Typically higher priced homes will have more room for profit then lower priced homes. Example: if you can find a home for 50% FMV (Fair market value) and sell the home for 70% FMV then you would have a 20% spread. 20% of $100k is far more than 20% of 20k.

The motivation of the seller-With all things being held equal, the lower the price that you can put the home under contract for, the greater your profit potential will be. Example: If you can buy the home for 50% FMV and you have buyers that are willing to buy homes at 70% FMV, your profit will be far greater than if you put the home under contract at 60% FMV.

The motivation of the buyer- Owner occupant buyers will typically pay far more for a home than another real estate investor. Owner occupant buyers are willing to pay more simply because they are looking for a home to have as their principal residence rather than as an investment property.

I have personally dealt with different variations of all of the above. When conditions have been have been perfect, meaning I had a very motivated seller and a very motivated buyer I have made up to $28,000 on a single transaction without the need for cash or credit. That is one of the reasons why I decided to become a full time real estate wholesaler.