My question is this, i know a lady that has a lot of lucrative deals at the moment. About 8 total. She’s looking to assign some of them or partner. I am a new real estate investor and i personally cannot put any money into the deal. However i do have some wealthy family and other connections that could put money into the deal. If i wanted to purchase an assignment by this lady or partner with her, how would i go about that? Like i said, i do have connections that can put money into one of these deals. What is the best way to make this work for everyone involved? Do i need to get any forms for the parties to sign? Whats do you real estate gurus think is the best plan of action to take?
As a casual observation (as i sit and read this club site on a friday night) is that you said a key phrase in your posting
“i personally cannot put any money into the deal. However i do have some wealthy family and other connections that could put money into the deal.”
You say the above, and yet by your own admission have no experience in real estate.
My next question is if your relatives and friends do? I hope they would and not just invest in the deals that “this other lady” is giving you so you can “experiment” with thier money. Maybe they would because of thier trust in you, but do you trust that you can advise them on this investment?
As an experienced investor myself, who started with nothing; if I had to do over again, Id go to those people with money, and thier advisors, and lay out every single card on the table about each deal. Then if they were still interested, I would then suggest that they advise you on what forms that need to be signed.
I dont mean to chastize, but I think that would create a better long term relationship between you (and your future business), your relatives and your friends whos money/credit you would like to use to move forward.
Of course i would lay everything out to them. My connections are savvy people, they’re not gonna throw me 5 to 10k and say go play…You didnt answer my question? I’ve done an immense amount of study and Im at the stage where im ready to start putting deals togethor. I dont have any of my own money right now, but i do have the ability to find profitable deals & make money for everyone involved. So assuming i have a deal worth 20k on the back end but i need 20k up front for repairs or whatever it may be and it’ll take 3 months w/holding costs already added in. As expereinced real estate investors, what would you do if you were in my situation? Partner w/ them if they want in? Get the money needed and offer a certain rate of return? Any other options? what would be the best way to approach?
At this point in your career, I would not offer a guaranteed return. First of all, if they are going to invest with you anyway, you dont need to make that promise.
Instead take the “partnership” approach.
I think this approach creates an expectation of two eyes on the deal, their and yours.
It may seem a bit Closter phobic, but if the project is successful, it will create a longer/stronger working relationship between you.
As with selling any project, there are people who need to touch things to understand them (tactile), so have pictures of the site, neighborhood, there are people that need to see things (visceral), lay out the numbers of the deal in a ms spreadsheet, show where money is going and in writing explain why, and there are people that need to hear things explained to them (audible), have your “story” worked out, pose questions to them like “what would make you comfortable about doing this with me”, “what concerns do you have about the risks we will be taking”.
Thanks for your advice Marko, good idea. i appreciate it.