Minneapolis, MN · Member since 2012 · 2 posts · 0 votes
I had recently met somebody who said they were looking for a 4 or 5 bedroom house on a contract for deed in Midtown area MNPLS and that they had 10k to put down. If I do find an investor who has a property available in that area-and it could legitimately be a deal, how can I make sure I get a referral fee from them (investor) other than just trust and a handshake and building a relationship? i.e. what kind of contract?
P.s. Aside from me finding out how much he can afford monthly, is there anything else I should do, or find out?
Oslo, Ostfold · Member since 2012 · 65 posts · 1 vote
14y
Just write a document (contract). where you state points i.e 5% of rental, or just one time fee. Get the terms, your benefits and his (Good that the other have benefits, so he will agree). Also state the length of the deal, for example as long as having the apartmant, or 1 year, as long as user rentswhich ever apartment of landlord. Just think what benefits you in long run,but within good reasoning.
Sign it with eventually one or twor witnesses.
Easy as that. Harder way is going through a lawyer, but normal people would not make troubles with agreement they have signed up on.
Oslo, Ostfold · Member since 2012 · 65 posts · 1 vote
14y
Just write a document (contract). where you state points i.e 5% of rental, or just one time fee. Get the terms, your benefits and his (Good that the other have benefits, so he will agree). Also state the length of the deal, for example as long as having the apartmant, or 1 year, as long as user rentswhich ever apartment of landlord. Just think what benefits you in long run,but within good reasoning.
Sign it with eventually one or twor witnesses.
Easy as that. Harder way is going through a lawyer, but normal people would not make troubles with agreement they have signed up on.
Oslo, Ostfold · Member since 2012 · 65 posts · 1 vote
14y
It works where I am living.
I.e if buying/selling a car. We write agreement that car is sold as is and free from dept.
Also if you not actually own apartment or are going to pay for apartment but just are third party it is easiest just to write a agreement. It would be expensive to have a lawyer for each referral, it will might cost more than what you earn. Sometimes some sort of agreement and trust can get you long way, and avoid people you smell troble from.
Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
14y
No, in most states its not as simple as that. This is "unlicensed brokering". You're brokering a real estate transaction. In most states in the US that requires a license. You are acting as the buyer's broker and trying to locate a property. Normally that job would be done by a licensed real estate agent who would try to find a property on the MLS that met their buyer's criteria. The listing agent and the buyer's agent would then split the commission. The trouble with a rent to own transaction is that typically little cash changes hands up front. So, there's not much money to pay commissions. Further, relatively few sellers will sell this way. There's some issue with the property or else the seller would sell via a traditional transaction. And the buyer is typically poorly qualified to buy (or else they would just get a loan.)
So, from an agents prespective this isn't worthwhile. You're looking for a needle in a haystack property for a buyer who may well not perform and if the deal does happen, you're not going to get a commission check at closing.
This form of unlicensed brokering is often called "bird dogging". Unlike "wholesaling" where the unlicensed broker is party to the transaction in some form, bird dogging is on very shaky legal ground. Unlike the wholesaler, you are not a party to the transaction. You really are simply a broker. Also keep in mind bird dog fees are typically quite small. Perhaps just a few hundred bucks. Don't put too much time into this expecting any significant payday.
Foreclosure Specialist · Miami Beach, FL · Member since 2012 · 131 posts · 123 votes
14y
Originally posted by Jon Holdman:
No, in most states its not as simple as that. This is "unlicensed brokering". You're brokering a real estate transaction. In most states in the US that requires a license.
Jon makes a good point here. Since the fees are so low, you have to ask yourself if it is really worth all of the hassle.
Now you mention that you are an investor... hmmmm. Have you thought of flipping a property to them? You purchase an investment property and they turn around and purchase it from you on a land contract. You make the interest and they get their property.
Real Estate Investor · Union City, GA · Member since 2012 · 13 posts · 0 votes
14y
I would have the buyer sign a contract hiring you as a consultant, and have the investor sign a fee agreement stating they will pay all fees for the client, make sure to put in the agreement when the fee is expected. Make sure you leave a space for the property address, client name, and investor name. Do this for each property and investor because the investor may show them a few properties.