I am a new RE investor and could use some advice on what I can do to help an established investor help me.
I have decided (after talking to a local investor) to “search and asses” deals for other invetors in return for a finders fee and the opportunity to watch the rest of the deal “go down.” RE that I will be searching for will be wholesale, forclosures, etc.
Now to my question…
As an established RE investor that buys wholesale, forclosures. prefor… etc. What information can I provide you that would give you that warm fuzzy feeling about a spacific deal?
Please feel free to elaborate.
I would suggest that you ask the investors what they are looking for. You need to know where they want to invest, what price range they are looking for, what they plan to do with the property, how many properties they want to buy per year/month/week, etc. Until you know those types of info, you will be spinning your wheels. It does no good to find a preforclosed property for 60% of market value if the house is not in the area that your investors might want to buy. If you have an investor that is looking for fixer-uppers, find fixer-uppers. If your investor wants to buy cherry properties that are ready to rent, then that is what you look for. In other words, sell them what they want to buy. The secret is to have investors that will cover the price ranges that you will be looking at, the areas that you will be scouting, and the types of properties that you can find. If you can do that, you can get some big paychecks.
Wilson has some great advice there. You can also broaden your prospects by running an ad for a super deal when you find one. If you find a bargain in any area the investors will come out of the woodwork to look at your deal. I see ads all the time that say cheap rehab. I know one guy who got 50 calls over the weekend on his ad and some how I ended up buying the house thru an ad here on this web site.
I like Wilson’s plan best but use whatever plan works including these and others too.
Now, after scouting out the property, what type of information would you like to see? I have a good idea of what I need, but I want to make the investor happy. Also, how should I present a deal to make it look more appealing? I could go as far as a suit and tie with a power point presentation. Sorry if I sound rediculous :)…
The suit and tie thing may be over kill and actually would turn me off kind of. Here in Texas we are more laid back perhaps. I forget what NC is like as far as dressing.
There is a lot of info needed. Mainly comps with pics if possible. Bids from subs or a contractor for the work that is needed would help too. At least have a guess of what the work will cost. I am only interested in the spread between the cost and the sales price. You may already know but 70% of retail less repairs is about the norm for rehab deals. Other type buyers may pay more for property if they plan on keeping as rentals or doing lease purchase deals. Some may not care about price as much as no qualifying loans with little down.
If it is rental property find rent comps. I am shocked when I ask Realtors how much the apt or condo or house will rent for and they have no clue.
All the other stuff is just details but needs to be known like # bedrooms, baths, # of tennis courts and pools etc
If I wanted to make money on a regular basis selling deals to other investors, could I lock that on in a contract or somthing that legally bindes the investor to pay me a finders fee? I know I could go all out, write up a contract with the seller then assign it, but I don’t think I’m ready for all of that.
The sky is the limit. You will probably need to work out the details with each investor you deal with. It is best to put it all in writing as both parties will not forget. I trusted a buyer once and he forgot about the $500 of the $2500 he promised to pay me. A one sentence agreement in writing would have earned me the extra $500.
You may be able to collect your fee up front before the deal closes, depending on the investor and how they deal with birddogs. Make sure the title company knows about the agreement and let them pay you if need to wait until closing.