When you’re wholesaling properties, understanding your wholesaling fee is crucial for tracking profitability and setting realistic goals. Let’s break down how to use a KPI formula to calculate your average fee and what that means for your business.
Why Your Wholesaling Fee Matters
Knowing your wholesaling fee helps you:
Set better marketing budgets
Determine the number of deals needed to hit revenue goals
Evaluate whether a deal is worth pursuing
By tracking this KPI, you make informed decisions that drive long-term success.
The Wholesaling Fee Formula
Here’s a straightforward formula to calculate your average wholesaling fee:
Average Wholesaling Fee = Total Wholesaling Revenue / Number of Deals
Example Calculation
Let’s say over the past year, you’ve made $150,000 in revenue from 10 wholesale deals. Using the formula:
$150,000 / 10 = $15,000
Your average wholesaling fee is $15,000.
How to Use This KPI
Once you know your average fee, you can:
Set Revenue Goals: If you want to make $300,000 next year, you’ll need to complete 20 deals at a $15,000 average fee.
Assess Deal Viability: Knowing your typical fee helps you quickly decide if a property fits your profit model.
Optimize Marketing Spend: You can confidently invest in lead generation, knowing how much each closed deal is likely to bring in.
Final Thoughts
Calculating your wholesaling fee using a KPI formula gives you a clear snapshot of your business health. It empowers you to make smarter decisions, set realistic goals, and build a sustainable wholesaling operation. Track this number regularly, and watch your company grow!
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