Indianapolis teams with conflicts of interest?

Question

Josh C. · Answer

No one has that much money. We are Property managers and also investors. We bought 4 properties this year. Two from the MLS and two from a wholesaler. Last year we bought maybe 8. If your property manager had unlimited money he probably wouldn't be a property manager. There were a lot more than 4 deals in Indy last year. Plenty to go around. And my criteria is probably different than yours. We like big rehabs while most investors want smaller jobs so they can finance everything. We have only one time offered on a house a client later contacted us about. We told them we had an offer on it. They actually went in 5 grand higher than us, the little devils, but either one got the house. So I think it's really a non-issue.

Good luck!

Zach Hoereth · Answer

I hear investors pose this question often, but I can only speak from experience. In the past, I have noticed most agents will not pull the trigger on good opportunities. However, I cannot say the same for property management companies. @Jason Tressler touches on a solid point that unless you are a REIT, hedge fund, or syndicator most times we all face the same problem... we run out of capital.

That said, to address your first question I do not necessarily believe having a team that also invests is a major problem. Each party will have varying investing criteria.

Secondly, I have noticed investors wiling to share contacts with others who are interested in the same area or utilizing the same team for a number of reasons:

1.) At one point or another that person who is sharing was "new" to the game and is willing to pay it forward to the next person. Believe it or not, I have seen this happen many times before and continue to see it today.

2.) Investors who have had a bad experience with vendor(s) like to share with friends, family, or fellow investors so that they do not run into the same troubles. The same can be said about having a good experience. Again, speaking from experience, but usually when investors refer others to a particular vendor they do like... it further develops the relationship with that vendor.

Keep in mind that at the end of the day real estate is competitive, but there are more than enough deals to go around. Good luck!

Cheers,

Zach

Andy Rumple · Answer

I train new wholesalers and yes that ultimately creates competition. But those who want to give and help others will pay that price. I find there are more opportunities to help and cooperate with my competition than there are direct battles for business.

Amil D. · Answer

@David Ripplinger   I don't think a decent property manager would steal the deal from you. Reputation is eeverything in this game.  Plus that would mean you would not work with them when you do get a deal. But I do think you're right that an agent who's also looking for deals will just give you stuff that they passed on.

Just don't depend too much on the MLS.  I'm not saying deals are impossible to find on the MLS but most of the good deals are gone before they hit the MLS.

I'm just a rookie in this game but that's my opinion

Joe Splitrock · Answer

It is ironic that your post just attracted all the Indianapolis wholesalers, real estate agents and turn key providers offering to help. Does the fact that they stand to profit from your business have any connection to them responding? Of course, 100% the only reason they are responding.

Just a reminder to everyone responding that self promotion is not allowed in the general forums. For example, self promotion would be a realtor in Indy telling an investor, I can help you invest. Or a realtor saying private message me. The general forums are a place for advice, not selling your services. The marketplace is where you sell goods or services.

Jeff Schechter · Answer

We run a very successful TK company here in Indianapolis, and often get this question.  Ironically, the opposite is true.  Although we usually sell everything we put in front of our investors, every once in a while something just doesn't sell.  At that point, we usually just keep the "leftovers" for our own portfolios.  They were prepared in the same way, and perform nicely, so it works out well for us.  What this reveals, is that even with the SAME criteria, there are deals/properties that will appeal to some investors and not others.

Amil D. · Answer

David,

Regarding real estate agents - Just do all the proper screening. Check outhttps://www.biggerpockets.com/blog/2016-02-04-investors-guide-hiring-real-estate-agentAmil

Caleb Heimsoth · Answer

@David Ripplinger I don’t think it’s a big issue.  Like others have said plenty to go around.

I’ve noticed lots of people are okay sharing realtors and PM contact info.  Where it gets tricky is good (reasonably priced) contractors.  Those people are a lot harder to get a referral for in my experience.

I will almost always give a referral if someone asks me for a realtor or PM.  Only in some cases I pause because I want to make sure the person I’m referring to them is not going to waste their time

Peter Stewart · Answer

Let's be real here, there's no doubt that investor/agents or teams that work like you describe take the best deals for themselves. Same with the wholesalers in town - of course they cherry pick the best deals to keep. But what they may consider the "best" deals may not be the best for you - everyones criteria is different (areas, property type, budget, goals, etc).

Now, a few good points got brought up:

• Not everyone has unlimited money, so it's not like *all* the best deals get snatched up prior to being presented to their clients. 
• -What you're looking for may not be what the agent/team you're working with is looking for. Using myself as an example, I only buy in A/B areas, and I only do flips for SFR's and I buy and hold multi units. Many of my investor clients like to buy in C/B- areas, and they buy SFR's to rent. So, we are not competing at all. Now, the challenge is when I have multiple clients looking for the same thing - that is a more likely scenario to happen, and this is where you can run into an ethical dilemma (depending on how you handle it). 
• Come from an abundance mindset, not one of scarcity - there are plenty of deals to go around.

To answer your two questions:

• #1. It's not necessarily a problem. In fact I would suggest working only with an agent/team who invests. I would not take investment advice from an agent who did not invest themselves. They won't know what they're talking about and they won't know how to properly analyze a deal. You'll get the most accurate advice and guidance from someone who walks the walk, not just talks the talk. Now, with that said, I personally would avoid the "all in one" teams because I do see potential conflicts of interest there - especially when it comes to the contractors. 
• #2. Going back to the abundance mindset, I can see why people may not hesitate to share. In a community like BP when you share, collaborate, and help others, karma has a way of paying it back to you.

Jason Tressler · Answer

I am happy to help, I am an investor and do full-service real estate too. No agent has that much capital backing them that they can buy up all the good deals. I honestly only take deals to my investors that I would personally buy myself. So when you deal with a good and honest investor agent you will get that type of treatment. I see deals ALL the time but don't have unlimited cash to buy them all. I'm with Hanza realty here in Indy and we have tons of resources to help investors be and stay profitable no matter what their goals are.

Indianapolis teams with conflicts of interest?

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