Ok, So I have looked to see if anyone has brought this idea up and I have yet to find it mentioned. I am a SFR buy and hold investor. I was buying off the MLS because the numbers were working. The numbers stopped working so I have to now market to motivated sellers. I am doing drive for dollars with letters to the distressed properties owners.
Another Idea I had is use my own renters as acquisition agents on the ground to go find me deals. I was thinking that if I CLOSED a deal refereed to me through a tenant that tenant will receive one months rent free. My average rent is $925.00. Is this a high referral fee? I have no idea what a normal finders or referral fee would look like. I just know one months free rent will get a lot of people working hard to get a house in my hands.
One disadvantage I see to this is tenants will realize the low prices I buy houses for. Houses just like the one they live in themselves and pay a not so low rent( in their mind). Even with this Im thinking this may be a creative marketing strategy that could pay off.
I will still need to look over the numbers and decide if this is financially wise for my business.
If anyone has attempted this or would like to speculate on if it would work I am open to your thoughts.
That's not a bad idea. I would try experimenting with it.
All states have laws that prohibit you from paying anything of value for real estate leads or referrals unless that person has a real estate license. In most states, it is a misdemeanor. Beware of unhappy real estate agents who feel you are eating into their income, and report you to the local real estate licensing commission or board.
There is often an exception for small referral fees or rent concessions paid to current tenants for referring new tenants, but that is not available in all states.
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