All Forum Posts by: Charlie MacPherson

Former Realtor here.  I've moved on to MUCH greener pastures.

From my experience, most investors - even my target of the "fix & flip" crowd will run you ragged, going from one mold-infested wreck to another.  My hope was always to get paid on both the purchase of the crappy property and on the sale when the rehab was done.

That sounds good if you say it fast.  In reality, many most never pulled the trigger, so were an utter waste of time and gas.  One in particular bought a house to rehab and let the carpenter (!!!) pick the floor plan.  The result was so bad that we could not sell it in a white-hot seller's market.  Sadly, it went to foreclosure and the seller took a serious beating on it.

If you want to impress the Realtor, show that you're serious.  Open your contact with them by showing both your pre-approval and proof of funds.  Include a resume of real estate projects completed.

By the way, @James Wise absolutely nailed it in his first post above.  Read that post and then read it again.  I share his opinion that OOS investors are a waste of time and money.  

He's on the right track by getting payment up front.  That filters out the chest-thumpers and windbags by getting immediate skin in the game.

I read through the posts here on BP and see one horror story after another.  Hundreds of thousands invested only to face the three "Ts" - toilets, termites and tenants.  Oh yes, I forgot about evictions, crazy neighbors and rent moratoriums!

Instead of buying yourself a headache, why not buy a turnkey business? 

These are all in Maine, New Hampshire, Vermont and Massachusetts.

Non-medical Home care company
Asking: $530,000
Cash Flow: 213,656

12 Bed Assisted Living Facility (SBA pre-qualified)
Asking: $200,000 plus real estate available for sale or lease.
Cash flow: 87,707

11 Bed Assisted Living Facility (SBA pre-qualified)
Asking: $335,000
Cash flow: $147,792

25-30 bed Assisted Living Facility (SBA pre-qualified)
Asking: $3.2M
Cash flow: $395,636

Carpet Cleaning Company
Asking: $350,000
Cash Flow: $147,000

Heating Oil Dealer
Asking: $2M + real estate (estimated at under $2M)
Cash flow: $600,000

Irish Food Distributor
Asking: $310,000
Cash flow: $100,000

Pizzeria / Sub Shop
Asking: $265,000
Cash flow: $156,000

Medical Wellness Clinic (SBA Pre-qualified)
Asking: $325,000
Cash flow: $125,000 (seller only works 20 hours/week)

Irish Pub in Presque Isle Maine (SBA Pre-qualified)
Asking $500,000 plus real estate at $500,000
Cash flow: $158,777

Plumbing & Heating Company
Asking: $200,000
Cash flow: $90,000
Real estate available for sale or lease

HOT LISTING!!
Shoe Store
Asking: $250,000
Cash flow: $220,000

Tent & Party Rental Company
Asking: $440,000
Cash flow: $122,000

Mobile Hardware & Electrical Distributor - SELLER FINANCING AVAILABLE!
Asking: $275,000
Cash flow: $100,000

Ouellette's Trading Post, Van Buren Maine
Asking: 200,000 plus real estate
Cash flow: $165,000

Landscaping, Hardscaping & Earthworks Company
Asking: $330,000
Cash flow $325,000

Countertop & Cabinet Store
Asking: $740,000
Cash flow: $295,411

Machine & Woodworking Tool & Supply company
Asking: $750,000
Cash flow $250,000

Some of these can be run as absentee.  Some sellers are willing to stay on as an employee and for a transition period.  Each deal is different, so let's talk!

Most of these companies include substantial equipment and real estate in the price, so if any of these look interesting, please contact me through BP or phone at 207-352-1000.  I'll get you an NDA and fill you in on the details.

PS - I am paying BIG referral fees for new business!  We pay 10% of our commission at closing.  A recent sale of a group of assisted living facilities would have generated a $55,000 referral fee, just for making an introduction!

Charlie MacPherson, Business Broker
Inbar Group, Inc.
www.InbarGroup.com
[email protected]
207-352-1000

Are you sure about your valuation?  I don't know anything about the Danville, PA market, but a quick look on Realtor.com shows homes ranging from $150K to over $400K with even a single-wide mobile home on the market at $90K.  There's nothing below $100K except for 227 Coles Aly (alley?) that badly needs updating, mobile homes and land.

You said it is in "somewhat rough" shape, but it must be a real disaster / tear down to sell at $15K.

I'd at least consider fixing it up to the point that it will survive and FHA/VA/USDA appraisal.  In fact, Danville, PA shows as being eligible for a $0 down USDA loan.  That means that once it's fixed up, you can advertise it as "Renovated Home - NO MONEY DOWN!"

If you just want to dump it, remember that investors need to buy well below the market value. 

You're MUCH better off putting it on the open market (MLS) with a Realtor and advertising it as "Fixer-Upper - Seller Financing Available".  That will bring you first time buyers who will pay market value.  Get a decent down payment from them and set your terms.  Those buyers can even look at an FHA 203K construction loan so you would be paid in full up front.

If you're in some sort of trouble and need to dump it NOW, that's where the investors come in.  You'll leave money on the table in exchange for a quick sale.

Good luck with it.

That is is Negotiations 101.  Just because an offer comes in doesn't mean that you have to treat it seriously.  In fact, one possible response is "come back when you have a serious offer."

Alternatively, you can counter.  His most recent offer is $900K on a $985K asking price.  (I'll assume that you're correct in stating that you've listed below market).

Your counter offer can be as simple as "Your offer of $900K is rejected and my counter offer is $984K.  You've set expectations by responding (showing that you're willing to continue the discussion) and by making a very small concession. 

That communicates to him that you're not going to take a lowball offer.  If he's only looking to buy if he can "steal" it (almost a 10% haircut!), you want to get rid of him sooner rather than later.

The other factors to consider are how desperate you are to sell and what are the current market conditions in your immediate area.  If you need to sell ASAP, make a larger concession.  If you see days on market suddenly going sky high, do the same.  If similar properties are scarce in your area, you should stand more firm.  You have to analyze the complete situation to know how to best respond.

Finally, the fact that this person is an investor and presumably wants to make a big profit from your sale is his problem. 

Don't let him make it yours.

I have reached financial freedom through business brokering.  My BFHG is passion-related.  

I'm a pretty hard core wildlife photographer with an extra passion for the arctic (in the summer - I'm not a complete idiot!).  I've done 7 trips that have crossed the Arctic Circle, but I have not yet set foot in Nunavut, Canada.

I not only intend to do that, but I'm aiming for a trip to Qutinirpaac National Park at the northern end of Ellesmere Island - about 400 miles +/- from the North Pole.

The challenge is finding an Inuit guide who can help me get there and search out wildlife.

These polar bears were photographed in Kaktovik, Alaska.  Just for fun, Google zip code 99747!

Former Realtor here. 

This sounds like a garbage job.  Cold calling on 100% commission with what sounds like a mismatch between the Brother A's wants ($40K - $90K) and what actually exists in the market ($200K - $300K) is a really bad bet.  If they're so convinced that it's a great opportunity, how about paying you an hourly wage?

As to experience, what experience are you actually getting aside of getting the phone slammed in your ear?

You are burning your time in hopes of getting very, very, very lucky - and not getting paid for your work.

For a comparison, I just hired a 19 year old caller (B2B) for my office.  He's making $15.00/hour, which is about right for an entry level job, especially where our cost of living in central Maine is lower than CA.  If he calls a business owner who turns into a sale for us, he gets an extra week's pay as a bonus.

He is getting experience in the world of business brokering and if he plays his cards right, can step into a mid-6-figure role when I retire in a year or two.

You would be much better off getting your real estate license and going to work for a reputable broker.  That's also 100% commission, but people buy and sell houses every day.  Transactions are common, as opposed to trying to find the unicorn where the brothers can lowball (screw) people.

An alternative is to work for a property management company.  At least there, you'll learn some other aspects of the business while making an income.

My advice is to step away and find something realistic, unless the "wealthy" brothers want to offer you a paycheck.

Lots of good responses here.  Let me add one more - liability.

If there's a fire or some other catastrophe and the fault is traced back to unpermitted work, you can expect your insurance company to deny your claim and any injured people to sue you into oblivion.

Get the permit and don't have that Sword of Damocles hanging over your head.

You might look at an SBA loan.

As a Business Broker, I can tell you from experience that when a seller says up front that they will offer financing, that's a red flag.

Almost every business seller wants to close on the deal, get paid and get out.  Those who don't MIGHT just be looking to defer some of the tax hit.  They also might know that the property won't cash flow in its current state.

A property that won't cash flow is - in general - a dog.  On day 1 after you buy it, you're in a negative cash flow position, meaning that you're making no income, PLUS your coming out of pocket to service the debt.  That's (with all due respect to Man's Best Friend), a dog.

Unless there is a simple strategy to turn that around, and I mean a SOLID, VERIFIABLE strategy, I'd walk.

Maybe your SFR strategy is a way to do that, but you had better talk with the town first to be sure that they'll allow it.  Don't forget to check for liens and back taxes / utilities too.

Good luck!

Make sure you work with a FULL TIME agent - and one who has been full time in the business for at least 3 years.

By full time, I mean that real estate is their only source of income.  That ensures that you'll get someone with decent experience, can help with negotiations, point out flaws you might not see, and have an intimate knowledge of the local area, etc.

You'll need to convince them that you're not a time waster / tire kicker  (these outnumber real buyers 50:1), so maybe prepare a personal financial statement and CV for them - and of course, be pre-approved for at least as much as you want to spend.

Good luck!