I'm looking to begin flipping houses. I've been doing research and want to make a move as soon as I find a deal warranting investment.
I was out this weekend going to open houses in order to see what's available in the market I'll be selling into. I saw a lot of lipstick on a lot of pigs. The very last house I went to see was beautiful. It was priced to sell at the heart of the market but it looks like a multi million dollar home (I live in Los Angeles).
I spoke to the showing agent who turned out to be the owner who rehabbed the property. We spoke for only a few minutes but he pointed out that he prides himself on doing foundation up rehabs with exceptional materials and craftsmanship. What he said showed in the property. All the details were impeccable.
He then went on to explain what he does. At first when he thought I was just a buyer he told me he could be a buyers agent and help me find a deal and advise me on what a good price might be for a property I was looking at. Then I explained what I was trying to do and he said he could be of service by being a general contractor and after we picked out a property, set a rehab budget, he could do the work.
If someone just mentioned all this I would be skeptical. It sounds like he's trying to be all things to all people. What has me interested is the fact that he was standing in this beautiful home that (based on its middle of the market price) will likely sell this week. His work speaks for itself. So I want to leverage his expertise but I 1) don't want to get taken advantage of, and 2) don't want to come across looking like an idiot to someone who might be able to help me towards my goals.
Any thoughts on next steps to take with him? How can I ask for his help workout coming across like a sucker he can take advantage of?
A rehabber/contractor/agent is quite a find. I don't know any of those. I would still get more than one bid on the work if I had a property to rehab, but would at least get on his list of potential buyers for deals. Maybe even try and do coffee. I too would be skeptical of someone who is all things to all people, but these skill sets are so complementary I would be intrigued to learn more. I haven't been to an open house in years. Have to reconsider that. Way to be out there in the marketplace @Joe Kling !
I think this is definitely worth following up on. I think skepticism at this point is warranted.
What volume of deals is he doing?
I would ask what part of his profits is from flips and what part is from being an agent. Although they are complimentary he may be a lot better at one than the other. Being able to do both is great for him, but if you decide to partner with him, you might want his role to only be what he excels at doing.
The easiest way to partner initially may be for you to be a private/hard-money lender for his next deal. It limits your upside, but you also have a lot more recourse if things go bad than you do in other arrangements. For any arrangement I would have a lawyer representing you in drawing up the agreement.
With his focus on quality, I would ask him how his accurate his initial estimates for time/cost turn out.
@Steve Vaughan - Thanks! I am going to ask him to coffee. I just want to try to prep quickly so that I can go into the meeting with a good understanding of what I am looking to get from it. I don't want him to dismiss me as someone who doesn't have a clue before I get a chance to at least get him to bid on a job.
@Jesse T. - These are a couple of good questions. Thank for the ideas. This is what I was looking for from this post. I want to be able to ask intelligent questions that will spawn some futher discussions which will help me gauge what he does. Thanks so much. I don't think he is looking for a partner, though. I guess i don't know if I don't ask, but I got more of the impression he is either looking to be an agent (for the commission) or as a contractor (for the contracting fees).
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