I’d really appreciate another set of eyes on something. Basically what happened is this: An agent told me that if I can put down 10K on a property, he has another investor who will use my 10K to secure a loan, and once they make the first draw in 7 to 10 days, I’ll get my 10K back. Then the agent will do all the repairs and sell the property and split the profit between himself, the borrower and me.
I’d be interested and would appreciate feedback on deals like this one.
Looks cool but tricky as well. See no one will leave his profit. There must be some hidden profit in the deal for him.
That smells like a scam to me. There were tons of fake “deals” like that when the market was hot a couple years ago, and many people who originated those deals have disappeared with money or were thrown in jail for fraud. Invest that $10k in your own real estate deal…and it will be a much safer & better proposition for yourself. Good luck
Too many chefs in the kitchen. Cut out all the unnecessary parts, (the other “investors”), and do your own thing. It’s safer and more profitable.
Ask that realtor if he has an extra 10K laying around to put into the deal??? these are scams, few still around trying to steal money this way.
Yup most times if it sounds too good to be true, it is. Ask the agent where is his dog in this fight? What does he stand to lose if this thing goes bad.
I am an Agent Johnny Hopkins with Allsource properties and what needs to happen is that you need to be the investor and get that house in your name and you may not need $10,000. I would not let them use your money if anything they need to give you at least a 40% interest in the deal. But put that in your name I would not trust that . If you have some issues with putting it in your name and getting you approved then that is a different story BUt I would not go in without representation.
Sincerely,
Johnny Hopkins
Sounds a little shady to me. If the money will be returned no problem, why do they need it in the first place? Remember, if it seems to good to be true it probably is.
Well, the first question I would have for him is if he’s had experience doing this before? I would ask to see the documentation to prove it.
What skin does the borrower and agent have into this property or is he expecting you to put up all the capital?
To go to a bank or credit union with $10K and pull out $10K to repay you + whatever is needed to do rehabs in 7 to 10 days sounds highly unlikely. What if he can’t get the $10K+ loan to repay you and can’t sell the property because he overpaid to begin with? That means he can’t give you your $10K back.
Are there independent before and after appraisals plus repair estimates or is he just giving an opinion as a realtor?
What’s your exit strategy if it has to be sold at a loss and how do you get your money back? Is the loan at least secured against some kind of collateral like the agent or borrower’s car?
And what experience does the agent have rehabbing wholesale property and what’s his turnover rate in reselling it? How many rehabs has he done before? Does he have the documentation to prove it?
It might be a deal. It might not. I’m strongly inclined to think you’ll lose your $10K principal from the information you presented so far, but I don’t have all the information.
I’m not an expert, but be careful of a big investment like that with someone you don’t know. Anything that deals making big money and etc, be careful. There are scammers out there.