I'd love to hear what other BPers think about this situation and what I can/should do.
My best friend approached me last October with the potential to buy a house from a family friend of his in the greater Boston area. This family friend is a motivated seller simply waiting for her ailing dog to pass away so she can move out of her house and into a trailer park. The dog has since passed away.
She owns the house free and clear and is willing to sell it to my best friend and I for a significant discount assuming we help her move and get rid of the things she can't bring to the trailer park. She's gotten to know the both of us pretty well, but my best friend remains the main point of contact for the deal. Otherwise I would be running with the ball as we speak.
Now, the numbers all make sense for us to purchase at the discounted price, clean the place up with minimal repairs and has an ARV that will yield us a great profit.
Here in lies the problem: my friend is becoming less and less committed to the deal and it's been increasingly difficult for me to motivate him. He hasn't had the best of luck in his personal or financial life over the past 5-10 years, but I figure something like this could be a catalyst to turn that around. Needless to say he's pretty risk averse. On top of that he has never been involved in a real estate transaction and knows little to nothing about real estate investing.
So, my question(s) is: What else can I do to motivate him? Should I remain persistent until I convince him, OR should I walk away and take his reluctance as a sign that this could be detrimental to our relationship?
-Eager for some feedback!
Well if he is your best friend, definitely walk the line so you don't dissolve the friendship. Did you need the money from him to complete the deal or just the contact? Get her contact info from him, tell him you'll handle the closing and give him $500 after you make your hefty profit and then hire moving men out of your own pocket.
If you need his money, then it's a different story. You could always find a partner on BP who is more motivated.
Don't need his money, just him as the main contact. I like that idea (relieving him of the up front financial burden) as a part of the story I am continuing to develop in an effort to get him focused. Thanks Scott.
Another option would be to make him a silent partner. Tell him to put up his share of the money and give you the contact and you handle everything a to z. However since he is not doing any of the work you take a bigger % of the profits.
Well if the only reason you are looking to work with him on this is that he is tighter with the seller than you are then I would be thinking about having a talk with him about doing the deal without him.
Just be like "Hey I really want to do this but I get you are not as convinced. Lets go talk to her and tell her that I am just going to buy the place and that I will just be the one chatting with her about the details on it all now."
I do agree with offering to give him like $500-1,000 after you sell it if you do good with the project.
Unfortunately there is always the chance that he might resent the fact you made a lot of money on it and will forget that you had to take ALL the risk and financial burden because he wasn't willing to do that. On the other hand he might be excited about the easy money and maybe sees that you pulled it off and asks about trying to work with you on another deal since it is more "real" now.
I agree with the others, but think you should give him more. $500 will be taken as an insult if you are going to net $30k on this (How much are you expecting to profit?)
Treat him like a wholesaler, pay him $5k for bringing the deal to your attention, and solely take over everything from there.
Hey Jared, I agree with @Scott S. to give him a Flipper's Fee of $5k if you're making $30k. (of course something up front and the rest after closing if you get the projected net profit)
Also ask his advice on how much he could do or put up to get a 50/50 split!
Should be plenty of meat on the bone to offer him a reasonable finder's fee, I think I will bring this option to the table for him. Thanks for the feedback and another nugget of motivation to get this deal done.
Adding to my goals: don't leave BP posts hanging for this long...
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