I live in Virginia and was approached by someone I know about building a rental portfolio for them. My question is , what if any RE investment technique could I use to find this person rental properties without being considered a broker? Can it be done (legally) would I need to form a partnership? any help would be appreciated
Hi,
I love Virginia as it's an extremely beautiful state!
How did you propose to be paid? Or how did the buying party propose to pay you? Percentage of property in cash? Percentage of property as equity? Salary? Consulting fee? Carry a note on each property? Hourly? Trade? Investment into other business? Annuity?
How is the buying party going to hold Title? Trust? LLC? S or C Corporation?
Are the buying party proposing all cash purchases or financing with 20 to 30% down?
What kind of a portfolio do they request you create? Residential? Commercial? Land?
If all your doing is setting up properties listed through realtors using a buying agent and placing ownership in the buying parties entity, you can just work as a consultant on a 1099! It’s basically the same thing as an anylist working for Donald Trump, as your just reviewing and lining up deals, your not the realtor, your not the escrow, your not on title and you don’t have a interest in the property!
Good luck,
GR
Hey Gold thanks for the reply and yes it is beautiful here.
I was to be paid a finders fee once I got teh home under contract.
He wants to build a rental portfolio so I suggested he form an llc to hold the properties in.
He has access to cash, he has great credit and a great occupation but with lending restrictions as tight as they are, and the time involved, he would rather not go through conventional bank lending.
He is looking at Residential properties
I am a wholesaler, I contract properties then assign, and move to the next one. I think he was thinking that I could find one of my wholesale deals and instead of assigning for cash, make him the end buyer so he could rent it out. The only issue with that is I dont do rehabs. Some of my wholesale deals need 20-30k in repair before they can be marketed.
If I find a rehabber to assign to and they do the work, I am not sure there would be enough room left for my Renter to get the property on a rent to own from the rehabber, then turn around and put his own renter in there.
The quickest, easiest, and best way to do this, buy all cash at big discounts, repair and get rented, then take the lease down to your local bank and get a mortgage on them for what you are in to it for. Rinse and repeat. If you have enough cash do it 3 or 4 houses at a time. If you did it right you should be able to get all of your money back and still cash flow using the 50% rule. This is exactly what I did. But when I hit 15 units I realized I was not landlord material IMO. Thankfully I am down to 6 units hoping to be at 0 soon. I made plenty of money selling them and have since done well flipping.
Good luck
John
Couldn’t you have hired a property management company to handle the landlording duties instead of letting go of your portfolio? I see them as the goose that lay the golden egg month every month and the way to early retirement. If there are no management companies in your area, I guess 15 properties would be a pain to manage.
yes I could, but I wasn’t really making that much money with 15 units. The golden egg was laid after I sold a lot of them for a profit, I took that 70K and have since turned it into 300K flipping. Couldn’t have done that had I held on to the rentals.