Potential Investor Wants Me To Back Off - He Needs the $ More

Investor · Saint Augustine, FL · Member since 2015 · 227 posts · 61 votes

Casually talking to someone and he says he lost his job and he wants to get into" house flipping" ...the market is insanely hot here and there are very few deals and there is a foreclosure coming up that meets my criteria finally ...he says that is the one he is going after to flip and that he has a family and he needs the money so I should sit this one out ! I have worked hard to be successful but I have to at least consider that he has a point that he needs the money more than me...

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Charlie Fitzgerald

Lender · Las Vegas, NV · Member since 2015 · 2k+ posts · 1k+ votes

10y

Do his family a favor and get the house so he does not put what money he has into a speculative RE investment with no job and no back up plan if things go south on him...and his family.

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James Wise
Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes
10y
@Zana Blue
Business 1st, Charity 2nd.
In real estate everyone has a sob story. Do what is best for your business.
Damon John (Shark Tank, FUBU) always tells entrepreneurs who want to do charitable work (usually at the expense of making their business successful) that you need to "make it before you can matter"
5 Reply
Chris B.
Real Estate Agent · Tomball, TX · Member since 2013 · 31 posts · 16 votes
10y
@Zana Blue What about talking to the"potential investor" about partnering up on the flip? If this is their first flip and you already have some experience then it could turn into a win-win for both of you. It would also allow both of you to make some money.
4 Reply
Account Closed
Professional · Lake Mary, FL · Member since 2016 · 30 posts · 11 votes
10y
I find your post very interesting from a business point of view. If you consider that your future business decisions will all be based on negotiations of some sort and you get emotionally involved to what better suits the other side rather than your own life and that of your families you are sure to fail. In this business you will be negotiating on every property and rest assured you need to buy at the best possible price and when you sell it at the highest possible price. My advice go after every property that works for you from a pure business point of view and keep the emotions in check.
2 Reply
Account Closed
Investor · Princeton, TX · Member since 2014 · 1k+ posts · 1k+ votes
10y
@Zana Blue I like friends more than enemies. If I was willing to talk to the person in the first place, I would be looking for a way to turn it into a win/win. Perhaps looking to buy homes on the same street. Turn it into a "all ships rise in high tides situation."
My other question, are you buying every house that fits your requirements?
0 Reply
Brandon Battle
Real Estate Agent · Buena Park, CA · Member since 2016 · 743 posts · 424 votes
10y
Tell him straight up,"You can be my partner or you can be my competition,decide".Life is a competition,win or go home and watch tv.
2 Reply
Zana Blue
OP
Investor · Saint Augustine, FL · Member since 2015 · 227 posts · 61 votes
10y
I have listings sent to me by Realtors...wholesalers...bird dogs...plus attend tax sales and foreclosure sales and do driving for dollars...deals are few and far between...I called on one yesterday and it already had 5 showings and was under contract in 12 hours...I would buy all day long if the deal makes sense but most are way over priced and can not make money on them as rentals and I don't think appreciation can go up much more...so I really want this one...I talked to him about partnering but he wants to do it on his own so he can make all the money ...
0 Reply
Albert Ng
Rental Property Investor · San Jose, CA · Member since 2015 · 401 posts · 221 votes
10y
There are more than 2 investors / flippers in Florida, aren't there? Both of you guys might not get the house
6 Reply
David Dachtera
Rental Property Investor · Rockford, IL · Member since 2014 · 4k+ posts · 2k+ votes
10y
@Zana Blue,
Well, I'll take a more humane position: instead of focusing on win-lose, try to find a way to make it a win-win.
For example, if you're in a position to do so, offer to be a private lender on his deal, or see if you can partner up with him some other way.
The path to success should not be a competition, it should be a journey on which we take others with us. Leaving their remains scattered in our wake does nothing to help us. "A rising tide lift all boats" - by supporting others we improve our own situation.
My $0.02...
David J Dachtera
"Success is not a destination. Failure is not an event. Success is a process, failure is a choice."
- DJ Benedict
2 Reply
Zana Blue
OP
Investor · Saint Augustine, FL · Member since 2015 · 227 posts · 61 votes
10y
Of course someone else can overpay and get the house and probably will :) I never said it was a competition... he said he does not want to partner with me that he wants to do it on his own and collect all the profits...and I use my investments to support an animal rescue and a scholarship at the local college for students who are the first in their family to attend college so I do not leave remains scattered in my wake....so I most certainly do support others both human and animal
4 Reply
Patty Cox
Investor · Oviedo, FL · Member since 2015 · 37 posts · 7 votes
10y
Business is business and I also say keep the emotions in check. You did the nice things by offering to go into this as partners. He chose to say no. I say, may the best negotiator win. At the very least he may learn a very valuable lesson which will help him succeed better in the future. This is your BUSINESS. Do not just let someone take it from you. It's NOT personal.
4 Reply
Chris B.
Real Estate Agent · Tomball, TX · Member since 2013 · 31 posts · 16 votes
10y
@Zana Blue if you offered to partner and they shot you down, then I say all bets are off. You tried to partner and help them out but they would like to "collect all the profits". I would definitely pursue the property on my own after that interaction.
3 Reply
Zana Blue
OP
Investor · Saint Augustine, FL · Member since 2015 · 227 posts · 61 votes
10y
That is not as good as the two guys at the foreclosure sale who tried to intimidate me and said if I didn't give them $20,000 they would bid it up ...I told them I didn't have $20,000 and went and stood by the deputy who is always there at the sales !
0 Reply
Adam Beckstetdt
Investor · Fort Wayne, IN · Member since 2016 · 108 posts · 24 votes
10y
No need to make enemies. If they are already talking freely to you maybe you can work the deal together. If you were at a point that you could/would step aside on a deal I dont think you would need to ask the question. Business first in this case. Good luck.
0 Reply
Steve Vaughan
Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes
10y
Did this "potential investor" already know about the opportunity before you spoke, or did you tell him about it?
You have worked hard to locate deals. Bid on it and let happen what may. You very well both may be outbid anyway. I hear sob stories and drama from my tenants. I don't need it from others.
4 Reply
Account Closed
Investor · West Los Angeles, CA · Member since 2014 · 230 posts · 239 votes
10y
@Zana Blue
You obviously have a good moral compass. I would say go for the property. The fact that this investor is asking you to step aside is not realistic. He is trying to personalize a situation that shouldn't be personalized. It's just a random property in the scheme of things. If 5 other investors bid on the property is he going to tell them the same hard luck story so they step aside? Highly improbable. Besides a first time investor chances are he will overpay make other mistakes and somehow lose money on his first investment. Let your internal compass guide your actions. Besides tough competition makes an new investor better or makes them realize this is not a business for them.
Good luck
3 Reply
Michael Noto
Real Estate Agent · Southington, CT · Member since 2008 · 5k+ posts · 3k+ votes
10y
do what is best for you. End of story.
2 Reply
Charlie Fitzgerald
Lender · Las Vegas, NV · Member since 2015 · 2k+ posts · 1k+ votes
10y
Do his family a favor and get the house so he does not put what money he has into a speculative RE investment with no job and no back up plan if things go south on him...and his family.
11 Reply
Daren H.
Real Estate Investor · Desoto, TX · Member since 2013 · 560 posts · 528 votes
10y
You referred to this person as "someone". You never said friend, very good associate, mentor, someone I am cool with and trust, etc. That is my first red flag for even taking them seriously. The second is it always peaks my curiosity when people talk about losing their job, being on the ledge of broke, have limited experience, but then decide they want to be the next big thing in real estate investing. It is like real estate is the path to easy riches for people with no money or experience. I know there are people who have had success going this route but this is the overwhelming minority I would imagine. I can't listen to just someone. You have to be "somebody" to me.
2 Reply
Timothy Farrell
Investor · Tampa, FL · Member since 2016 · 14 posts · 1 vote
10y
He must think you are pretty awesome to even ask something like that.He probably perceives that you are able to give from confidence,strength and being connected,not pity or weakness.
As long as you don't go into politics capitalism is probably not in any danger.
I think you are one of the few who are qualified to answer your question.
0 Reply
Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
10y
@Zana Blue relationships aside.. the reality is if its a good deal and going to auction I suspect he will get out bid... and it will be a moot point....
I doubt in your area if its hot and there is a good deal there are only you and him bidding on it... someone will come out of the wood work and out bid you both is my bet.
But I hear what your saying .. When I had my RE brokerages often times I would just give listings away to my new agents so they would get experience.. I could just as easily listed them myself or my wife as we owned them all.. but I would give those folks a chance to learn and earn.. My two other partners NO way to the tenth power would they ever give a home they owned to someone else to list LOL...
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Tyisha G.
Long Island, NY · Member since 2015 · 138 posts · 20 votes
10y
@Zana Blue How gracious and humane of you to even be concerned. I was initially siding with others who mentioned to find a win-win situation. However, when you pointed out all that you do (which is honorable) and the individual declined to a partnership, well, I now agree with @Chris B.. I hope you update the thread as to what happens. Best to you!
2 Reply
Vicki Gleitz
bennett, CO · Member since 2014 · 225 posts · 122 votes
10y
Originally posted by @Chris B.:

@Zana Blue What about talking to the"potential investor" about partnering up on the flip? If this is their first flip and you already have some experience then it could turn into a win-win for both of you. It would also allow both of you to make some money.
Love this idea!
0 Reply
Brad B.
Investor · Bakersfield, CA · Member since 2013 · 146 posts · 93 votes
10y
Maybe the best thing you can do for this person is to compete with him on this property even if it means you end up buying it. This will cause him to realize that he needs to change his mindset in order to be successful. Asking for charity right out of the gate when entering a new career is dangerous and you have an opportunity to nip that bad habit of his in the bud. In the long run, he'll thank you for it because he was forced to compete and learned how to build a sustainable business.
If you want to give him a little money for groceries this month, that's great, but don't enable his bad habits.
1 Reply
Ryan Dossey
Real Estate Broker · Indianapolis, IN · Member since 2014 · 3k+ posts · 2k+ votes
10y
You don't need that kind of negativity in your life. Or that drama.
0 Reply
Mike H.
Rental Property Investor · Manteno, IL · Member since 2009 · 2k+ posts · 2k+ votes
10y
I've got a couple of friends in different areas that we both invest in.
We kind of have an unwritten rule that we don't bid against each other if we know one of us is bidding on the property.
But we also have another unwritten rule not to tell each other about the houses we're bidding on.
Ultimately, we're all trying to make money. And that guys family is no better than yours.
I guess the question I'd have is who brought up the house first? You or him? If he brought the deal to you to ask you questions about it and put it on your radar, then I'd say you should not bid on it.
But if it was a house you were already looking at, then as soon as he started in discussing in you should have told him that you were bidding on it and not to mention numbers.
At the end of the day, you'll benefit from someone if you mentor them and help them become successful as well. But you don't do that by stopping to buy houses so that they can get better deals.
They need to compete with you because you'll both be competing against the entire town.
I made that mistake once. My friend was new and he was telling me about a house that I had been watching but havdn't seen yet so I figured I'd back off. Well he was saying how big the rehab was going to be. At the end, he decided he no longer was interested. I went to look at it and the rehab was about half what he projected and it would have made for a great deal for me.
Unfortunately by then some new bidder had jumped in and they snapped it up.
So I think the answer to this one depends on how the property was brought up between the two of you and what you're really trying to do. Are you trying to help him get started? If not then it doesn't matter. If he brought the house to your attention, then maybe it makes sense to pass.
But if it was a house that you had been watching its fair game and you need to go after it. Its not your job to give someone else the cherry pick deals. He needs to compete like everybody else. If he can't compete, then he's in the wrong business. If he doesn't get the house, he can find or should be able to find another deal in the future.
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