All Forum Posts by: Adam Sanders

You can put a contract in writing with the buyer if you want to be certain. However, typically your best option is just to deal with trustworthy people and being explicitly clear with what your arrangement is with them. You can't cover everything in a contract.

It really depends on the arrangement you have setup. When you are first starting out it is pretty typical to only get paid if the deal closes (you make money when the buyer makes money). Once you become more established and have a bigger pipeline of deals coming in you might be able to leverage that into a relationship where you are paid per lead. It really depends on the quality of your leads at that point.

Bird dogs find leads on potential properties and flip the INFORMATION to their wholesaler/investor contacts for a "finders fee". They typically don't do any negotiating or put anything under contract. Wholesalers actually put a property under contract in some form and then sell the contract and right to purchase the property to an end buyer. 

In larger cities this is a pretty common arrangement, especially for large apartment buildings. There are leasing agents and even leasing companies that specialize in helping renters find apartments and property owners find tenants. From what I have seen the agents are paid somewhere around half a month to a month's rent by the property owner (though it varies by market). The agent covers all the pre-lease work and the property owner has final approval on the tenant. Once the lease is signed the agent walks away with their check.

Have you talked to your friend about owner financing? Outside of traditional bank financing that is the most common route I have seen.

The higher your debt-to-income ratio is the more difficult it will be to secure additional financing. Purchasing your own home doesn't automatically disqualify you from additional financing but as you add additional debt you are viewed as a riskier and riskier borrower.

Expected return is all over the map depending on a huge number of factors including your experience, location, property type, etc. It is easy to lose a lot of money with new development if you are not experienced. On the flip side, if you know what you are doing there is a lot of money to be made. Most of the developers I have seen look for an IRR of at least 15-20% of the length of time they hold the property but these are usually very experienced guys.

Get a copy of the reverse mortgage agreement or talk to the company that is holding the note. They likely outline in the agreement the circumstances under which the house can be sold.

A few thoughts on your questions:

1. You need to consider that converting a portion of the apartments to subsidized housing could have a very real impact on the rents of other units that are not subsidized.  Renting an apartment in a subsidized building is less desirable by those paying full price which could drive down the rents you can demand for the other units.
2. Typically you need to go through the full certification process in order to be eligible to receive subsidies.
3. There are guidelines for rents and subsidy amounts you should look into. How those apply to your property will dictate how much and how frequently you can raise rents.

If you want to get them out quickly you are going to have to convince them to leave on their own. If you go through the eviction process it could take several months to actually get them out. Reach out to them and let them know that you will be ending their lease on X date. Tell them you are due $X in rent for prior months but if they are willing to leave quickly and easily you will forgo collecting. Otherwise, you will move forward with the eviction process and summarily file a claim against them for the back rent. Try to arrive at some sort of win/win if you can.