OfflineI am very frustrated. I have 4 different "investors" who have recruited me to find good deals in the Dallas/Ft Worth metroplex for them. I have found SEVERAL, and when I present them, they all just drag their feet! I email the details, and they don't even bother to respond. One that DID respond told me it didn't fall into the "65%" guidelines they stick to so the deal is no good. Yes, Dean's books are awesome. Yes, he gives great advice on the best formulas etc to focus on. But if you are trying to make money, why don't you fall back on one of his first programs, and think a little different?
For instance. I have a property that is being sold for $110k. It needs about $20k worth of cosmetic work (I already have a fantastic contractor who does fast, professional work for less than any other I've come across), and once that's done its worth $185k. Factor in closing & holding costs (about $16k) and there is a potential for $40k profit here. But I cant get any of my investors to touch it because they want to stick with projects that will earn them over $100k each deal, and they will only consider homes with ARV between $200-$500k.
I have a pretty solid plan for what I want to achieve over the next year. I want to find an investor who trusts me and is ready to make some money. I will act as both the buyer's agent (when the investor buys the property) and the sellers agent (when the property has been rehabbed and is ready to sell), so I don't expect any other payment outside of that. I will do a walk thru with a contractor to determine the costs and repair needs, present the property info to my investor, determine together whether its a good candidate for us, and then lock it up. Once the sale is final, I can coordinate the contractors to make sure the remodel/rehab is done quickly and correctly. Once the rehab is complete, and the property is ready to be put back on the market, I will be the listing agent and get it sold quickly. I have many years of comparison shopping in Dallas, preparing for when I would be able to put my plan in motion. I spent way too much time procrastinating, so I'm ready to get started NOW.
You get your profit, I get my commission, the contractor gets paid and the new buyer gets a great home... we are all happy! Why does it seem like I'm the only one who sees the mutual benefits of a partnership like this?? I guess I need to go ahead and build a buyers list, instead of trying to be a loyal agent to the investors who "hired" me.
Monica
Monica
Skeptic, turned hopeful, turned determined!
You will NEVER succeed if you don't try.
you missed it
YOU said above:
"But I cant get any of my investors to touch it because they want to stick with projects that will earn them over $100k each deal, and they will only consider homes with ARV between $200-$500k."
I have buyers that will ONLY accept:
1. buyer says- I ONLY want Brick and hardwood floors - NO price range - has to make $20k
2 buyers says- I ONLY want sfh, 3/2 in good neighborhoods-lower price range- has to make 15% ROI
3.buyers says - I ONLY want fix/flips 3/2 sfh under $200k ARV, don't care where,but need to get 30% ROI
etc, etc,....SEE?
SO, you HAVE TO get the buyers What THEY Want to make the Deal!!
DON'T try to SELL them a CHEVY if they Want/Need a FORD...
They will NOT be interested!
Best Wishes on your REI journey
Mike
see links below
Mike
https://tvallc.isrefer.com/go/RehabLite/renvestr/ Free tools
Read through some of the old forums about the pro's and con's of being an investor and an agent. There is a lot more money to be made as an investor and you are utilizing other peoples time when you have an agent (that is not yourself).
I get what you're saying, Mike, I really do. And in traditional real estate, being primarily a buyers agent, I do cater to my buyers requirements. But considering these are new investors who don't have access to much capital, they just asked me to find them deals, I'm surprised they come back with such picky responses. They have yet to make any money with real estate and Im handing them an easy paycheck, but they want bigger profits.
@ Ryan, thanks for the tip... I have spent the last couple weeks reading the forums for at least 3 hrs a day, but there is a ton of information and I tend to thread-hop so I forget where I started lol thank God for bookmarks! I know there is more money in being the actual investor, but I am just trying to focus on spotting the deals for now. Once I have helped a few others find good deals and gotten a little cushion saved up, then I will try it on my own again. In Texas the laws are complicated regarding an active Realtor receiving any funds other than standard commission.. and even if Im buying the property for myself, I have to disclose that Im a Realtor and then the seller usually tries to drop my commission. So its a process. Hopefully Im on the right track... Time will tell!
Monica
Skeptic, turned hopeful, turned determined!
You will NEVER succeed if you don't try.
to ensure you get ALL needed info
you can find this form and many, many more by clicking my username (reinvestor42) and then 'track' button
BE SURE to BOOKMARK items of interest so you can find them later on left of page in 'My Bookmarks'
Mike
https://tvallc.isrefer.com/go/RehabLite/renvestr/ Free tools
When some one gives me that rigid 65% buy formula I know they are not real investors. The guys I know look at what can be made. No real investor will look at a property in an area with low average DOM, with an investment of $145,000 and profit of $40,000 and say no thanks. I bet your buyers are just newbie BSers that have read a book or watched a webinar and have no REAL money themselves.
Now if they are telling you that they don't want to work entry level first time home owner stuff than that is an entirely different story. I would look for houses in those upper price ranges if I were you. That is what we do here.
Why? Less competition from fellow wholesalers, end buyers can qualify, houses appraise, low average DOM, profit margins are larger. Your profits are larger also.
You need to expand your buyers list no doubt. The deal you describe is a great deal for people that work that market.(providing your numbers are accurate!!!) So either your buyers want more expensive houses (that's good) or they are pulling your chain. Either way you need buyers to wholesale the entry level stuff to. Always build that buyers list!!!
Good Luck,
Michael Mangham
Mentoring/Team Building Nationwide
MD Home Acquisitions LLC
Knowledge is power, but execution trumps knowledge. Tony Robbins
http://www.mdhomeacquisitions.com Seller site
http://www.mdhomeacquisitionsbargainhouses.com Buyer site
http://www.mdhomeacquisitionshousehunter.com Bird Dog Site
http://www.mdlodeals.com Tenant/Buyer site