Posted by pboone on April 09, 2000 at 14:21:31:
Boy I wish we could find someone who can do the job you seem to have done.
Pat
How long do we wait - Posted by Steve and Sharoo
Posted by Steve and Sharoo on April 09, 2000 at 12:28:02:
Did we goof? Six weeks ago, we left our jobs to concentrate on REI. We had approximately $3500 to operate with, so we followed the advice of many and concentrated on flipping properties. Five weeks ago, we came across a fellow investor who appeared to have a pretty good set-up with all the right contacts and investors lined up. What they proposed was that we would bird dog for them, receiving anywhere from $500-$5,000 per house closed on. Having been researching, but not practicing investing for a year, we figured great, here is a good place to start. We were to concentrate on finding run down, abandoned, and condemned properties. We would estimate fix up costs and fax the information to them. They were going to handle the negotiations and contracts. In the last five weeks we have faxed over approximately 100 leads (we weren’t working as hard as we could have). When phoning in, we kept getting stories on how the office has had some changes in manning that set back the time table some, however offers are in the mail. Now we are near the end of our financial rope and are faced with the real possibility of going back for a j-o-b. How much longer should we expect to wait and is there any way to see if we are being taken advantage of? We love what we are doing and are looking forward to when we can do the renovations ourselves, but it looks as though opportunity may be flying out the window!
Blind leading the Blind - Posted by JD
Posted by JD on April 10, 2000 at 11:34:33:
Did you goof? Probably, I dont see why you both had to quit your jobs. This investor you have been bird dogging for probably did not adequately think out (or possibly you didnt understand) the terms of the partnership. As you have demonstrated, it is pretty easy to find potential deals when you are not very discriminating. The hard part is evaluting, filtering and getting a “deal” in writing.
I agree w/ Piper, also do this - Posted by Bob H
Posted by Bob H on April 10, 2000 at 03:54:01:
Qualify your existing leads. It sounds as if you have indentified potential properties, not potential deals. Many a hovel owners are happy as the proverbial pig in sh*t, and have no desire to sell.
Take your existing list of properties and either get on the phone and call the owners, and/or send them a letter offering to buy their property. From your responses you should be able to find 2 or 3 actual prospects. From that point, negotiate your best “cash” deal and try and get a short term option (30 days is plenty) while you do your “due dilegence”. A word of advice here - learn & know your market. You can have 100 options, but if there’s no upside, you’ve got nothing to market to a rehab buyer.
In the meantime, find yourselves some active rehab investors who are actually doing deals. Drive thru your area and find rehab’d properties that are currently for sale or are under contract - chances are the owners are in the market for their next project. If the option you have negotiated makes sense, you will have no problem finding buyers to sell it to.
Re: How long do we wait - Posted by phil fernandez
Posted by phil fernandez on April 09, 2000 at 16:47:52:
What I see here is nothing that you may have done wrong, but you probably have a buyer that you were going to flip the properties to, that can not perform.
Granted some of your deals were probably not deals, but 100 and no sales to your end user. And the excuses that they make would raise ared flag very quickly.
Do what JPiper has suggested. Control your deal. You’re doing all the leg work now anyway.
Re: How long do we wait - Posted by JPiper
Posted by JPiper on April 09, 2000 at 14:34:58:
A few comments about your situation.
CONTROL is one of the important elements to any real estate deal. That?s what you lose when you embark on a technique such as the ?bird dog? idea that you describe. One possible consequence to losing control is what you?re now experiencing. Your success sinks or swims based on one person?s activity. That?s a position you should strive NOT to be in.
Rather than to be a ?bird dog?, a position with much more control is to tie up the deals yourself. THEN you contact possible investors with your deal with the goal of either assigning or doing a simultaneous close. This way, you?re not locked in with only one investor. You find these investors by running an ad, or perhaps through networking with a REI club, contractors (many of whom are investor wantabe?s), or others. There are lots of people who want to make a buck, so if your deal makes sense, and permits others to make a buck, you?re on the correct path.
100 leads in 5-6 weeks is fine?.but don?t get the idea that 100 leads turn into 100 deals. I doubt if there are truly that many good deals?.so you need to sift through those, identify the ones that DO make sense, and then go tie them up.
The bottomline is you should never rely on simply one person or one deal when it comes to putting money in your pocket. Too many things can go wrong when you?ve positioned yourself that way.
As far as your current situation, I would view this as a learning experience. If your financial position is such that you need a job?.so be it. Perhaps one of you can get a job, the other can continue to pursue deals. Or perhaps each of you can get jobs that aren?t too demanding, so that you have time to continue to pursue deals?.albeit somewhat less intensively. You may have lost this particular battle, but the war is not over by a long shot unless you choose it to be. Just recognize where the error was here, and move forward in the manner that is open to you at this point. A couple of deals will put you right back where you were to begin with.
JPiper