I met a seller Saturday who owns a vacant house sitting in a excellent neighborhood. I saw the house about 3 months ago and sent him a yellow letter. We've talked on the phone about 5 times but our schedules never lined up to see the property. He is about 2 hours away from the property. We met and he told me he's an investor...a pretty successful investor at that. He has one of the most diverse portfolio I've come across.. I was honest and up front with him on a lot about the house and the reasoning behind my offer.
He told me he gets postcards all the time but decided to meet me because I was pretty consist with him and was never pushy. I always kept a good rapport with him. He told me someone offered him 75k for the house and he flat out cut the visit short because he really knows he has a good house. He said he'd be leaving too much meat on the bone selling it for 75k.
The house needs about 15-20k in work and homes in the area go for 158k-178k.
He told me he could stay in the house for 2 weeks and knock out the work with his team (he owns a contracting company) and put the house on the market for retail. His only reserve was he'd actually loose about 15k during those 2 weeks if he pulled his team away from the commercial jobs he has them on.
He said to me "Why don't you buy the house and renovate it and put it up for sale?" I've only been wholesaling for 4 months but I didn't want to tell him that...so I told him it was more so a capital thing for me which holds me back. He then says well how about this. If you tell me what you were looking to make from passing it off to a buyer I'll double that. Only condition is we do a contract between us. I'll put up the money for the renovation cost but you oversee everything like the general contractor and as if it was your flip. I don't cut corners so things have to be to my liking. You GM the job and then we put it on the market and I pay you a % of what it sells for.
He looks and says I know you'd make more money doing that versus passing it off right?
Has anything similar ever happened to anyone before? If so what was the outcome? Would you take him up on his offer?
BTW my offer was 85k
Do you think you could honestly over see a renovation and know what needs to be done? IF you think so then go for it, doesnt sound like you have any financial risk and you stand to make more profit.
Why not , go for it.
My first attempt at investing was a flip about 4 years ago in which I ended up losing about 10k. So yes I think now I have more experience with overseeing the renovation process @Curt Davis
I heard a great quote once about opportunities... it went something like this... "When given an opportunity you aren't sure you can do... grab the opportunity and figure out how to do it later!"
I think most of us regret passing on great opportunities out of fear of the unknown. I know I missed out on a great opportunity in my career because of it.
Here you have an opportunity not only to make a healthy return, but partner with someone who sounds like they have a thriving real estate business. This could be the first of many deals if you play your cards right... I say deal yourself in!
If I found a house with an ARV of $168,000 and $17,500 of needed repairs, I would be willing to pay a max of $98,800. This deal sounds better than that so I would take it.
Ever see a chicken jump on a Junebug?
@Cass R. Smith sounds like a dream come true, lol
I am beyond jealous. Do it. For those of us little guys who WISH such a deal would present itself to js!!
@Cass R. Smith Just want to make sure I'm reading this right.
Seller owns the house, knows what its worth does not have time to rehab it. You were offering to sell it for him and he countered that he'll front the money for the wholesale deal that you would have made, and then told you he'd put up all the cash to do the rehab if you would take care of being the PM for it + giving you a % of the sales?... all with 0 money out of your pocket?
This sounds like an amazing chance. Take it figure out the details later!
Go for it man, you'll learn a ton as well during the process and have a new future partner/investor/buyer for your deals.
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