Flipper/Rehabber · Philadelphia, PA · Member since 2016 · 22 posts · 5 votes
10y
You've got the right attitude. You may get 49 No's but then the 1 yes you've been waiting for. As long as there is equal risk for both partners, I don't see why it couldn't work. Good luck!
Investor · Draper, UT · Member since 2015 · 193 posts · 48 votes
10y
@Jerryll Noorden Search out and find a local REIA. These groups have meetings every month. There are many experienced investors that you could discuss this deal with.
Flipper/Rehabber · Wilton, CT · Member since 2015 · 4k+ posts · 4k+ votes
10y
Originally posted by @Account Closed:
Jerryll,
If someone put up all the money, they be wanting 70% and give you 30% because you have no skin in the deal.
Brandon does deals where he finds the properties and his partner puts uup the money and they split profits. It is 50/50 or nothing . finding good deals is not easy and I have significant money invested in marketing to find these deals.
Flipper/Rehabber · Philadelphia, PA · Member since 2016 · 22 posts · 5 votes
10y
Your best best would be to up your wholesale deal, if an investor will still make 30k profit than there should be no issue. But actually asking an investor to 100% fund it and get half, that sounds very undesirable. Get creative and build a good rapport.
If someone put up all the money, they be wanting 70% and give you 30% because you have no skin in the deal.
Brandon does deals where he finds the properties and his partner puts uup the money and they split profits. It is 50/50 or nothing . finding good deals is not easy and I have significant money invested in marketing to find these deals.
Why are you spending significant amounts of money in marketing to find the deals if you then don't have the money to act upon them? Agree 50/50 may work as an equity partner with someone proven who you can trust, but investing all that money inow a total stranger is a difficult sell.
If someone put up all the money, they be wanting 70% and give you 30% because you have no skin in the deal.
Brandon does deals where he finds the properties and his partner puts uup the money and they split profits. It is 50/50 or nothing . finding good deals is not easy and I have significant money invested in marketing to find these deals.
Why are you spending significant amounts of money in marketing to find the deals if you then don't have the money to act upon them? Agree 50/50 may work as an equity partner with someone proven who you can trust, but investing all that money inow a total stranger is a difficult sell.
No worries. I have found someone willing to partner up. "significant amount of money" = about 2K - 2.8K per month. To act upon these deals I would need 60K (acquisition) + 36K (repairs) = 100K.
So that is quite a difference between significant amount for marketing and acting on the deal myself.
You absolutely have a point. There needs to be trust. But I never said "yo blood gimmie 100 geez ma homie lemmie try to make some doh". All I said was looking for a partner to work together. So, if they want to handle all the flipping and contracting and camp on the grounds to oversee the whole thing, oh heck yeah. Absolutely. I am not even asking for their money. They can handle all that if they like. I simply am looking for someone that can use my skills to find good deals, and I can use their infrastructure to flip a house and we both walk away a tad bit richer.
As of now I am hoping to have a property signed for about 71K and ARV = 210 while repairs will be about 32K.
Once I get this (I hope I will) I do NOT want to wholesale it. Not going to make that mistake again. I want to flip it, and make something more substantial.
It took me several months of marketing to finally start getting deals. If I knew it would take 4532 postcards to get this deal sure then it is no big deal. But I market, and pump money every month not knowing if it will result in a deal or not, and keep doing it month in month out. The money spent, the drive, the motivation the effort, the hussle, the risk, the nerves, the not-giving-up, the time put into it not knowing for a fact something will come out of it... heck, the angry calls, the racists bastards telling me to go back to "italy", the asking why they can not speak to Dixie (my super hot partner) calling me fake, asking me where I am from because anyone in the USA with a foreign accent is either a terrorist or a scammer.. this is the fact of doing marketing being me...
If anyone doesn't think this deserves at least 50/50 I will happily tell them to shove their uneven split up their butt and let them find their own 66% discount deals themselves. Yes you read it right. The property I found I got for 33% ARV! The next one I am about to sign is similar!
So either they can take the deal and split 80K with me each getting 40K, or they can walk away pissed and I will split that 80K with the next investor with a bit less greed and more brains!
Yeah I am tired and sick of wholesaling. But there will be good news tomorrow!! You will see. :D
Your best best would be to up your wholesale deal, if an investor will still make 30k profit than there should be no issue. But actually asking an investor to 100% fund it and get half, that sounds very undesirable. Get creative and build a good rapport.
Julia, here is the flaw to what you are saying.
To you, heck .. to most, it will be undesirable.
But to one. Just one, it may not. I do not need 5 people to partner with. I just need one.
Then why is everyone taking this as a shot in the dark. I am not asking anyone for money. Secondly, I am not just guessing with my eyes closed. I have done the analysis, I will show anyone that partners with me the facts, numbers, the 4 contractor quotes I received, the pictures of the house videos of the house, the ins and outs, they can do a walk through with me, they can get an inspector.
If they feel it is a good deal, then they will act on it.
Again, what is the difference between them finding said deal all on their own and putting their own money into it, vs. me finding the deal, and they "pretend" they found it, they putting their money into it and what ever THEY make as profit we split.
I am not asking for money. I am simply asking to partner. I find the deals, they flip it, we split it.
Besides my theory is correct. I have already someone interested partnering with me. As I said.. I just need one person.
The problem with upping the wholesale deal is that it quickly stops looking like an OMG WTH amazing deal, and it just becomes a "good" deal. And to wholesale a property "a good deal" simply is not good enough for many investors.
An example, (as this is what scientists do best..)
I get a deal for 60K repairs are 40K, ARV is between 175 and 185 K
If I partner I will make 40 K. And it is tempting to tell an investor "Hey moneypants, I have a deal for you. 100K house with 40K in repairs, you make 40K wink wink".
Does that sound like an amazing deal? heck no
But.. you tell Mr money, hey hey, I got a deal for 60K!!! only needs 40K in repairs and we make 80K
Suddenly this sounds a lot better even if the numbers are identical.
And is it really identical? No not really .. why?
Well glad you asked boys and girls.
Here is why.
Partnering.. we split all the risks. Let's say we didn't get to sell it for 180. But only sold it for 160K. Now WHAT!!
As a wholesale deal, Mr moneypants becomes angrypants and only makes 20K.
If we partner... heck we can still make 30K each. Even if it sold for 130K.. we make something.
If it sold for 130K in the wholesale deal, guess what.. money pants would be in debt (10K).
Because dear Phil.. I will never build trust with anyone like that.
Sure you can spend the next 2 years wholesaling and slowly built capital to graduate to flipping.
Or you can be smart, and speed things up, by partnering with someone and fill each other's shortcomings with each of our strengths.
I am fairly confident in myself now that I am pretty good at getting good deals. It is a bit early to tell but I choose to believe this as believing often makes things happen.
So when I do find the opportunity to make a significant profit, why not share that, make less right now, but turbocharge the linear graph into a parabolic or exponential one shortening the time it takes to reach your end goals.
Flipper/Rehabber · Philadelphia, PA · Member since 2016 · 22 posts · 5 votes
10y
You've got the right attitude. You may get 49 No's but then the 1 yes you've been waiting for. As long as there is equal risk for both partners, I don't see why it couldn't work. Good luck!
You've got the right attitude. You may get 49 No's but then the 1 yes you've been waiting for. As long as there is equal risk for both partners, I don't see why it couldn't work. Good luck!
:D :D
Julia,
I talk all loud and strong now...
But I tell you. It was HELL! Tomorrow will be a big day for me. It will determine if all I did so far has been worth it. I am so excited and tired and... I am numb.
Thank you for the guidance. It is really good people here tell things as it is. Keeps one grounded.
I would definitely consider it 50/50 If this deal was in my area (NJ/NY) and I can be involved, although I would want you to put in at least 10 percent.
Real Estate Broker · Orange, CT · Member since 2013 · 951 posts · 218 votes
10y
Investors look at the numbers. The numbers are going to equal out at the end of the day no matter how you word the deal. If you have a deal with a profit, investors will buy, love you, and keep coming back.
Flipper/Rehabber · Wilton, CT · Member since 2015 · 4k+ posts · 4k+ votes
10y
Interesting. SO my question to you is, and I am not being sarcastic.
Why would you want me to put 10%?
Is it so I have "skin" in the game?
If so... I see your point.
Now see mine...
I got something everyone wants. A good deal. What I do not get is what logic is in place here to turn things around and make me put 10% into it also.
To me this is like you being in the dessert for 3 days and are dying of thirst. Here comes a monkey with a bucket of water and you tell it, give me your banana and in return I will let you let me drink from the bucket.
I do have skin in the game. I got my name on a contract. If I do not sell it or handle it in time.. big trouble. I invested time and money in marketing. If you (the generic "you") do not feel this is acceptable.. what will happen,.. you miss out on a good deal and someone else will step in and take it. All this assuming you were local.
If the deal doesn't work out, I could happily sign a contract saying the house will be transferred to the buyer if anything messes up with flipping.
There are a ton of ways to make it a "safe" transaction for the buyer.
But in any case the way I see it... I am the one with the goose with the golden eggs. If the deal is good enough buyers "should" be fighting over the deal... no?
My point is... there are better ways to handle risk mitigation. I mean 10%.. that is nothing... if a deal goes sour. I think 10% is just an illusion of safety for you.
But that is just me.
If I had a deal, I rather tell the seller I am cancelling the contract than giving in to greedy people (not accusing you).
A good deal is a good deal, and there are legit ways to handle risk... basically eliminating it as much as you can.
By doing due diligence on the house.
All such things like "skin in the game" does is create a false illusion of safety.
This because, me ALSO having something to lose is not making the deal any safer. OK so I will loose 10K if you lose 100K... the end result is.. you STILL lost 100K. Will it make any difference to your bank account that I also lost 10 K?
Investors look at the numbers. The numbers are going to equal out at the end of the day no matter how you word the deal. If you have a deal with a profit, investors will buy, love you, and keep coming back.
Phil my man, yes yes yes. That is exactly what I think as well!
What makes you not walk away from the deal if you bump in to hardship?
Ask the bank why they only give 75 LTV even if you found a property a million dollars below market value. Its because they don't want people walking away
Flipper/Rehabber · Wilton, CT · Member since 2015 · 4k+ posts · 4k+ votes
10y
Tzvi,
How am I not being reasonable?
I honestly think I am very reasonable. A difference in opinion does not make me "unreasonable".
Your "mistake" is that you are looking onto others to see if it is a good deal for you.
Much like.. telling a wholesaler "hey you are making 50K ?? while i only make 30K" when otherwise
If you didn't know he was making 50K you would have been content with the 30K.
No this is not being unreasonable. This is evaluating my hard work finding scarce deals and putting equal value to it.
The way I see it, I had a lot more risk than the flipper would have.
A flipper CAN do due diligence, find out an accurate ARV, and even subtract 10, 20, 30K from the ARV just to be sure, and calculate quite accurately what the minimum profit will be he will be making.
He can then say yes or no to said deal, and no big deal.
Me as the wholesaler have no such luxury. I market and market AND FRIGGIN MARKET my butt off having no idea if it will amount to anything, if my list is even a good list at all, if my marketing pieces are even effective, if the recipients .. even if they are in desperate need to sell... will even see my mailers... soo many variables without any guarantee there will be an ROI at all.
No no my friend. I am NOT being unreasonable.
I think if you try doing wholesaling "the right way" you will not say such blasphemy me thinks. :)
Cash is King, you need the cash you will do it on his terms, when you have cash you will do it on your own terms that's the way of life.
If you are so confident in the deal, why do you want a partner, go get hard money, go max out your Credit Cards ...................
This is true IF you were the ONLY one with cash.
But as it stands... there are a lot of people with cash, not soo many people having good deals.
So no cash is not king. It is economics 101. How did the saying go?
In Dutch it's "in het land der blinden is éénoog koning"
No idea if this saying exists in English.. but roughly translated.. in the land of the blind, the one-eyed guy is king.
Basically he/she who has what is sought after makes the demands. That's why this is a woman's world. Men want women seemingly more than women want men :D. So women rule supreme.. sadly.
LOL I am backing off. I like your passion its a great thing it should get you far. and just by the way I understand how you feel I am in the same boat all the time, but that just the way of life.
Flipper/Rehabber · Wilton, CT · Member since 2015 · 4k+ posts · 4k+ votes
10y
Actually Tzvi,
I reread your post too. You also do have a point..
What if I walk away..
That is definitely something of concern to a cash buyer. I just think there are better ways to deal with that. Maybe put in a contract that if I do you get the house and all profits. Not sure if this would be a solution though..
Please do not see it as an "argument" I am defying you (not actually defying you.. more like defending my viewpoint) to actually understand how partnering works and what it is like being a cash haver... and what their concerns are from their point of view. Discussing this and provoking opinions actually makes me (and maybe others) realize what conditions you need to satisfy to ease and please a buyer, and in hopes as well that a buyer realizes the world of the wholesaler.
I tell you this much. Someone that can argue a good argument and gets valid points across is a very trustworthy person because you can predict such a relationship. Someone that gets frantic and starts saying something .. anything just to be right... beware of dealing with such people.
So now.. all what you have done, is show your worth and knowledge and I will take anything and everything you say seriously and with caution.