Re: would you do this deal - Posted by GL(ON)
Posted by GL(ON) on July 02, 2002 at 19:01:15:
It’s not bad but not sensational either. Under the circumstances your friend should settle for less.
The killer is that it is 1500 miles away. I wouldn’t even consider it if it were more than 30 miles away. You can’t do a deal like that by long distance.
The other thing that comes to mind it that if it is so good, he shouldn’t have to look 1500 miles away for a buyer. He should be able to sell it easily to a local person. Usually when they have to look that far for an investor it’s because you can smell it if you get closer.
How sharp is your friend when it comes to real estate? Can you trust him not to take advantage of you when he knows it is practically impossible for you to keep an eye on him? If so, there is another way of doing the deal that may be better for both of you.
What if you offered to go partners with him and split the profit? You put up the $4000 and he does the repairs, then either he manages it as a long term investment or you sell it and split the profits?
This gives you a man on the spot with a vested interest. The only question is, how honest is he and how good is he at following up?
You might point out that if this deal goes well, you can continue this type of investing using your money and his expertise and work. In the long run he could make a lot more money, in fact unlimited money, if lack of capital is all that is holding him back.