First Deal Jitters with an out of state Realtor
First let me start by saying how excited I am to be a part of BiggerPockets. What an amazing platform and marketplace to help new investors understand real estate. The $390 to be a Pro member is worth every cent just for the information and tools.
So here’s the deal:
I found a couple of off market properties out of state owned by the same person, who is a motivated seller. I analyzed said properties with criteria my mentor and I set up, as well as all the information I could soak up from the BiggerPockets community, and found that both properties could be positive and came up with a number I could offer for them.
The first property is a manufactured home with an un-permitted addition that I will probably never be able to sell. However it is a safe harbor home run by a pasture who takes people in who have jobs and need help getting back on there feet. Because it meets the 2% rule and I have a passion for helping people who help themselves I think it will be ok to buy and hold this property. Who knows, when I become successful at real estate maybe I will gift it to the pasture so he can continue with his passion.
The second property is a much better deal. The only problem I see is that it is currently occupied by tenants and I would like the property to be delivered vacant. It’s a fix and flip that meets all my criteria and when I put together a stellar team in that area I know it will be profitable.
The Team:
I’m currently working on putting my team together and here’s where my inexperience makes me nervous. Because the properties are out of state I’m using Zillow, Redfin, Craigslist, and Yelp to analyze what real estate agent is best for me. I put my top ten list together and and sent some emails to see who has experience with real estate investors and fix and flips.
One in particular grabbed my attention and I contacted him. We spoke and I explained the situation. I also informed him that I would not be coming to look at the property and I would like to have very good documentation of what the current state of the property is. He was very understanding and said positive things about the area. He is willing to look at the property and help come up with a good ARV. I felt comfortable enough to give him the address and gave him the property managers info to schedule a walkthrough to establish how much construction we need to do.
The Dilemma:
After all this transpired my excitement was through the roof. The potential to make a little money and help some people out has really lifted my spirits (I was just in a serious car accident and it’s been dragging me down a bit.). I reached out to my mentor started to explain the details and cautiously excited for me here was his response:
“Realtors can f#%k up deals too. If a realtor goes to the seller and tells them the property is worth xxx even if it’s not, just to get the seller excited so they list with them”.
Naturally I became nervous after that statement.
My Question:
I guess the obvious question is:
Did I make a mistake?
And I know that question can only be answered with speculation until all the events transpire.
My second question for the BiggerPockets community is:
In the future when dealing with these situations how do I protect my deal when I have to give pertinent information to people who I can only guess if there intent is honorable?
Is there a strategy to protect the deal but also get the information you need without going to the property? An NDA maybe?