I've spent a lot of time figuring out what is the best way for me to get started in real estate. I've decided since I don't have the money to invest in real estate myself that I want to find deals for others and essentially sell them them the contract for a percentage of the profits. (I didn't want to wholesale because I discovered I can send a lot of buyers and sellers to realtors as long as I got a real estate license which will be completed shortly.)
However, my hang up is how much should I be asking investor's for since my only intent is to find the property, and then assign it into a new partnership. The partner would be required to do all the work and potentially bring the money for the project. What do you think is a fair split as a finders fee, and should this be different for a fix & flip vs a rental?
So you want to wholesale, but for equity? Probably not going to happen but It would have to be a really low percentage, especially for a rental. You might be able to make it happen on a flip if you agree to list it for free though.
Thanks for the response, I can understand why someone wouldn't want to do it with a rental especially with low margins. Assuming I listed the property as a part of the contract, would 35%-40% of net (before taxes) be fair for a flip?
35-40% net on a flip JUST for bringing the deal?
Sure, where I am the market is extremely competitive. Houses in the mid to lower prices ranges are on the market for less than a few hours at a time. REI's are hard enough to come by as is. What do you feel would be an appropriate amount?
@Jonathan Loosle depends on what flipping margins look like but something approaching a slightly higher than standard commission if things go well is probably where you'll be; so in my area that would be maybe 20% of the profits, but you run the risk of if it fails you get nothing or less than standard. A better strategy may be just to bring it to someone in exchange for the listing when the flip is complete.
@Colby Hager I am in Atlanta, Ga and get emails daily on available real estate. I am also willing and able to go out and look for properties as well. If you are interested I would love to touch base with you and see if we can work together.