Most failed wholesale deals were priced wrong at the offer, not marketed wrong afterward. By the time you are struggling to place something, the mistake happened weeks earlier.
Pricing a wholesale deal is arithmetic run backward from what your buyer needs, and the parts investors get wrong are consistent enough to list.
The Calculation, Backward
You are not pricing from what the seller wants or from what you would like to make. You are pricing from what a buyer will pay, minus what you need.
Start with after-repair value. The defensible figure, built from genuinely comparable recent sales with condition accounted for. The single most common error is using a renovated comparable to value a property while separately estimating renovation costs, which counts the same work twice. The selection rules are in how to calculate ARV.
Subtract repairs. Honestly, with a contingency. More on this below, because it is where deals die.
Subtract your buyer's required margin. Not a rule of thumb, the actual number your buyers work to. Ask them. Most will tell you plainly.
Subtract their carrying and selling costs. Holding, financing, closing on both ends, and agent commission if they intend to list it. This is routinely left out, and leaving it out is why a deal that looked fine on paper gets no offers.
Subtract your fee. What is left is your maximum offer to the seller.
Note the order. Your fee comes out last because it is the flexible part. Everything above it is determined by the market and your buyer, and pretending otherwise produces a contract nobody wants.
Where the Seventy Percent Rule Helps and Where It Fails
The familiar shorthand is seventy percent of after-repair value, minus repairs, minus your fee. It is a reasonable starting filter and a poor final answer.
It works as a screen because it is fast and it is roughly calibrated to a flipper's economics on a mid-priced property in a normal market. Use it to decide what is worth analyzing.
It fails in specific and predictable situations. On high value properties the percentage is too conservative, because fixed costs do not scale with price and buyers will work on a thinner percentage for a larger absolute profit. On low value properties it is too generous, because the same fixed costs consume a larger share. In a hot market with competing buyers, the effective percentage rises. In a slow one it falls. And for a rental buyer it is close to irrelevant, since they are pricing from cash flow and financing rather than from resale, which is the analysis in rental property analysis.
The correction is to stop applying one percentage and start knowing what your actual buyers require, which is knowable by asking them.
Repairs Are Where Deals Die
The number investors most consistently underestimate, and the one experienced buyers check first.
Estimating repairs from photographs is unreliable, and estimating them optimistically is how you sign a contract you cannot place. A buyer who walks the property and finds twenty thousand more work than your sheet claimed does not negotiate, they walk, and they remember.
Practical discipline. Walk the property yourself and photograph the problems rather than around them. Get a contractor through it during the inspection period on anything significant. Add a contingency, because something is always found. And treat the big-ticket items as their own line rather than folding them into a per-square-foot figure, since roof, systems, foundation and sewer are what move a number by tens of thousands.
The mindset that helps: estimate as though the buyer will check, because they will. Being ten thousand high costs you a little margin. Being twenty thousand low costs you the deal and the buyer.
Pricing to the Buyer, Not to the Property
The insight that separates wholesalers who place deals consistently from those who price by formula.
Different buyers pay different amounts for the same property, and it is not because some are foolish. A flipper prices from resale minus profit. A landlord prices from rent and financing. A section-by-section rehabber with their own crew has a lower cost base than one hiring everything out. An owner-occupant buyer, where the property is habitable, will pay well above all of them.
Which means the question is not what is this property worth. It is what is this property worth to the buyer most likely to want it, and pricing for the wrong buyer type is a common and invisible error.
A tired rental in a stable working neighborhood is a landlord's property, and pricing it on flip math produces a number nobody pays. A dated house in an appreciating area is a flipper's property, and pricing it on rental math leaves your own money on the table. Working out which buyer this is for happens before you set a number, which is why buyer criteria is the input rather than the output.
What to Do When the Number Is Too Low for the Seller
The situation every wholesaler faces, and there are only a few honest responses.
Explain the arithmetic. Not as a negotiating tactic, as information. Most sellers have never seen the calculation and some of them will engage with it. The ones who do not still respect being shown.
Offer the trade rather than the price. Certainty, speed, no repairs, no showings, a date they choose. That is the actual product, and it is worth real money to the right seller, per what makes a seller motivated.
Check whether a different exit changes the number. A property that does not work as a wholesale might work as a creative structure or a hold, which is the decision in choosing the exit.
Walk, and stay in touch. The most underused option. A seller who will not take your number today frequently takes it in four months when their situation moves, and the follow-up is what captures that, per email sequences for real estate investors.
What not to do is sign anyway and hope. A contract you cannot place costs your deposit, the seller's time and your reputation, and it teaches you nothing about what price would have worked.
Testing Your Price Before You Commit
The step almost nobody takes and it costs almost nothing.
Before you sign, call two or three buyers and describe the deal. Address, condition, your repair estimate, your after-repair figure, and the price you are considering. Ask whether they would want it.
Their answer is worth more than any formula, because they are the market. If three buyers say the repairs sound light or the resale figure is optimistic, you have learned that before committing rather than during an inspection period.
This feels like showing your hand and it is not, because these are people who want deals from you and benefit from you pricing them correctly. Wholesalers who do this routinely have far fewer dead contracts, and the conversations double as the relationship building that makes disposition work at all, as set out in the guide to disposition.
Pricing an Occupied Property
The case that breaks most pricing formulas, and it comes up constantly.
A tenant in place changes the buyer pool, the timeline and the number, and wholesalers routinely price occupied properties as though they were vacant and then cannot place them.
For a flipper, an occupant is a serious problem. They cannot start work, the removal process varies enormously by jurisdiction and can take months, and the cost is unpredictable. Most flippers discount heavily or pass entirely.
For a landlord buyer, a paying tenant is an asset. Income from day one, no turnover cost, no vacancy. The same property is worth meaningfully more to them than to a flipper, and if the rent is at market it may be worth more than vacant.
So the occupancy status does not adjust the price so much as select the buyer, and pricing follows from which buyer you are selling to. A performing tenant means you are selling to landlords and should price on their math. A non-paying occupant or an owner who will not leave means the pool narrows to buyers who handle that specific problem, and the discount is real.
What you must not do is describe an occupied property without saying so, or characterize a non-paying occupant as a tenant. Both get discovered, and both end the relationship.
Pricing for Speed Versus Margin
A deliberate choice worth making consciously rather than by default.
Priced at the top of what the market will bear, a deal takes longer to place, attracts fewer buyers and carries real risk of not selling at all. Priced with room, it goes quickly to a buyer who is glad to have it and who answers your call next time.
The arithmetic usually favors the second, and wholesalers systematically choose the first. Two thousand less on this assignment against a buyer who takes four deals a year from you is not a close call, and it only looks like one when you evaluate deals individually rather than as a business, which is the argument in repeat buyers.
Where your fee should sit within that range is worked through in what is a reasonable assignment fee.