George
You really never said what you where offering it at. But I'll assume in was within the rehabbers normal criteria.
I've had this happen from greedy investors testing me, and from those who have just gotten so into the habit of going for every last penny on the table.
One of my early deal-maker friends always had the philosophy of take some, leave some, and it works for me.
The first time I had this happen was a long time ago but my response was "so what your telling me is if I go back to the sellers and pay them more money then you will be interested in the deal at this price?" His response was no you got a really good deal so I should get a better deal too.
"Oh, so what your telling me is when you sell this to your end buyer your going to give them a better deal then you would have because you got a really good deal when you bought it, is that what your saying?
No matter what the answer which I'll bet is the wrong answer you say, 'I'll tell you what, if you agree to limit your profits to what I think you should make, I'll then limit my profits to what you think I should make, is that fair? and we can put it in the assignment that any profits over $ will be divided 50/50." Then shut up!
When I first started, wholesalers were very rare, and rehabbers and contractors wanting business were a dime a dozen, so it was never a problem.
The last rehabber that did that in my area became the victim of his greed. All the wholesalers wised up and formed an alliance to blacklist him, and with his basic greedy nature finding a deal and putting it together with a seller was not his thing.
He did try to go behind our backs when he heard of a deal we made, and he offered to work for other rehabbers or take over one of their deals, but eventually he had to come to us with his head down and agree to pay a 5% premium (of arv) for the next 3 years. I would have rather put him out of the business or forced him to move to new territory but was outvoted.
Maybe next time I'll form a wholesalers guild. I started as a rehabber and still do them most of the time when it makes sense. If your buyers list is not doing it for you, then rehab and retail the deal.
You may be worried about the rehab costs because you haven't got the money. but believe me it's easier to get then you think. You can get it from somewhere if you try.. Private loans, a 203k fha buyer, title one loans, suppliers that will carry, credit cards, car loan, internet loans like prosper, a one time partner,etc,.etc.,etc.
Mar 25 '09, 10:13 PM
