How to get help without someone stealing my lead

Question

I have a lead for several aces of raw land, prime property in a very desirable suburb of Nashville (Concord Rd. in Brentwood).  If I can manage to get it under contract, I would like to wholesale it or partner with someone to develop it.  Is there a way of partnering with someone who can evaluate the land for development, to figure out what I can offer, without losing the lead to the builder/developer?

Jay Hinrichs · Answer

Cody I call it porch time... I spent a decade in the forest products bizz in the NW.. we bought and sold timber land timber rights stumpage etc from private owners.  Plus I have developed over 500 lots in the PDX area in the last 2 decades as well..

all these owners were like yours... Many times owned it since the turn of the century.. DO not need the money ( so they say) and when asked how long they need to think about your offer instead of telling you a week they would say 6 months to a year to think about it.

its more about building reporte'  I was far to impatient for this part.. but my partner was the master.

He always had his cooler full of fresh Chinook salmon he caught ... Elk Jerky Elk steaks etc. all these NW farmers grew up on that stuff .. and so Steve would lead with a nice chunk of salmon get on the porch and talk about everything under the sun.. he built reporte.  some he would close in the first few visits some took years.

now the fact that this guy called you is a good sign.. I would get over and start building that reporte and gentely nudge him into an asking price.. and see if its remotely feasible.

Many land owners are out in left field for what they think their land is worth.. they have no clue about soft cost entitlements infrastructure carry costs etc etc..  they just see a one acre being sold for 200k and they have 40 acres so of course their property is worth 8 million.. LOL..

good luck with it.

Devan Mcclish · Answer

@Cody Holbrook make them sign a cowholesaling agreement or something to that effect. Basically, the agreement should state something that protects you: "If you purchase this property within the next 12 months, you owe me x number of dollars or x percentage of the deal."

Get an attorney to draw it up for you

Nick C. · Answer

Hm, generally speaking if the seller's motivation is to get the highest price possible they're not motivated enough to get a deal done. A seller who is willing to wait years doesn't sound very promising to me.

Jay Hinrichs · Answer

As well as your now moving up in sophistication of your buyer.. its not some home flipper doing simple remodels this will be a builder developer usually pretty substantial.  you best be in a position to close on the deal... that's why most the folks in Know that do this are agents .. they get listing to protect themselves.. its pretty tough to flip dirt or a plat if you don't have the powder to close and the money to get your entitlements.. its rare that you will buy it cheap enough from the farmer that a builder is going to give you any kind of finders fee... they will just wait until you can't close and go direct.  that why when I am working on a plat I get in a position to close .. I have flipped plats on pass through escrows.. ( not legal here anymore) and made 500k or more on some.. but I was in a position to close and the builder knew it.

Cody Holbrook · Answer

@Jay Hinrichs  I don't think this seller is that sophisticated, but I do have POF and serious EM deposits if needed.  My biggest struggle to get this under contract will probably be the seller wanting the maximum price they can get.  Seller said they're willing to wait years to get a higher price.  But they called about selling... I'm not sure what their motivation is.  Do they want to sell or not (redundant question)?   How do I figure out the price I can get it under contract with and still find a buyer who will pay that price, plus my finder's fee?  Does anyone have any tips on what to tell a seller who says they might hold onto the property for years more, waiting for it to appreciate more?

@Nick Colamarino  @Devan Mcclish

Nick C. · Answer

Get it under contract first, you can amend it if you need to later. After it's under contract seek out a partner and come up with a fair split, depending on who is responsible for what.

Luka Milicevic · Answer

@Cody Holbrook Let me know how this deal goes. I know that area and it's extremely desirable!

Aaron Anderson · Answer

I agree with what @Devan Mcclish said. For agents, we call it a "Rollover Clause".  It says just that, "If this property sells through an Agent/Professional not listed, X amount of compensation will be paid to @Cody Holbrook."  Get it in writing!

Cody Holbrook · Answer

@Nick Colamarino  Yeah.  I'm thinking if they're not that interested in selling and they want top dollar, I might just fall back on listing the property on the MLS for them.

Jay Hinrichs · Answer

In my experience in the building and lending field.

If your in a hot market and land is really hot... the sellers will know it and they will want POF right up front and serious EM deposits.. if you have neither of those unlikely you can put it under contract unless you have a completely unsophisticated seller... analyze your seller see where they fall in the above then play to your strengths.

How to get help without someone stealing my lead

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