Hi BP nation Jermaine here, I just ran into a friend I havent seen in years she asked how was my real estate business doing, I told well and that I was in the process of locating funds for a 6plex $45k at 10% interest, she then told me she know someone who would be interested in lending me the $45k I need but she would like to get a $500.00 finders fee after the deal closed.
What do you guys think, I always use my money in the past but I like this deal.
This kind of thing is not uncommon in this business. Use your best judgement, is the deal good enough to justify the extra expense and what other options do you have to finance it?
thanks Andrew, I will add her "fee"to my numbers and reevaluate my deal thanks again
Generally paying a fee to find money is a bad idea. Never pay money up front.
In this case I would probably pay it. I would make sure I was not breaking any laws by paying a referral fee. I doubt a borrower is breaking any laws but I am pretty sure your friend is by accepting the fee.
I have found that when I pay for referrals, it pays itself back 10 times over. Your referral payment not only gets you the deal, but it also gives you a dedicated birddog that becomes another set of eyes and ears for you. There is nothing better than when deals start to fall at your feet instead of you chasing them down!
I am trying to start birddoging in the San Diego county area and believe that a referral ($500) should be paid out of escrow/ closing. Does anyone have any thoughts about this for someone who daily delivers flyers and finds distressed properties all the time?
Greetings @JERMAINE LUCAS . I agree with your referral fee.
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