Frustrated with Investor... What next?!?

Question

Hello All!!

I'm posting in hopes that someone might provide guidance.

I am becoming very frustrated with my investor as I continually send good flips her way with excel spreadsheets to back up repair estimates (we own a remodeling company so we are pretty good at figuring it out) as well as CMA's that back up my ARV because I am a licensed agent with access to the MLS.

There is ALWAYS an excuse with her and I feel as though she'll never actually give the okay to buy something. "Not a good time to buy." "We'll finish the flip at the wrong time of year to sell." "It has septic." "It has a well." "What if what if what if..."

I feel like I'm searching for a needle in a haystack and I'm passing up on all these great flip opportunities. I guess our goals aren't aligned as I am looking to grow slow and steady and she just wants a home run.

We can't afford to flip on our own and she is the only investor I know of at the moment who would actually be able to move fast on a deal but I feel like I'll never find the perfect deal for her.

I think we've arranged a great deal with her... it's a 50/50 profit split where she provides the finances and we manage the entire project, from using our own guys to subbing out to other contractors if need be, to designing the final product to SELLING IT for NO COMMISSION! (Also, she's flipped plenty of houses before so this isn't new to her. We've flipped one house, BRRRR-ed a multifamily and we own a construction company.) I've found deals that had $40,000 profit in 8 weeks with EXTREMELY reliable repair estimates and ARV and she still says no... is that not a good profit margin for a 50/50 deal? Should I offer to take less money to get a deal going?

I guess I'm wondering what should I do next? There are so many things I could do. I know I'd be great at helping other investors find deals as I love the hunt and the research and even the excel spreadsheets and CMA's that go along with the process. I'd love to be the investor friendly real estate agent. But does that create a conflict of interest when I'm also trying to invest?

Any insight would be helpful!

Gilbert Dominguez · Answer

For God's sake we are living in the age of free flowing information. Get your deals out there to as many investors as you can. This way you can find out for sure if it is her or you.

There is nothing worse than taking no affirmative action. You must know that by now. You just cannot let yourself become dependent on just on investor. Think of other ways to meet more investors.

If a house in on septic then buy an waste incineration system, they are available. If a house is on a well then buy an water purification system, they are also available for purchase and installation.

I once got myself into the same situation with one single investor and the minute I got rid of them I started buying and selling properties left and right.

The way you are going about it you are not running a business. You are catering to one single person's whims.

Now days when I meet investors that are not as interested in making money for me as I am for them I kindly thank them and walk them out the door. You have to get up that kind of confidence. You are after all their gold laying goose and if they simply do not need you then you are wasting your time. You are working your ass off to make them happy but they are not reciprocating. She is not seeing you on equal grounds as a fellow investor she is seeing you are a lower level helper she really does not need. Time to face the fact and set your sights on someone different.

Kiersten Vogt · Answer

@Anthony McEvoy Thank you! I think part of the problem is she's family... I didn't want to believe that working with family is tough but it really is! I guess you could say I was more of a laborer in everything else we've done together.

Believe me, I've asked for a narrowed down list and when I deliver, there's something else I need to add. I think from what people are saying here, I already know I need to move on!

I know networking will help and have recently found a few meetings that take place in my area so I'll try a few of those to start!

Kiersten Vogt · Answer

Thanks for checking in @Anthony McEvoy!! Funny enough I found a potential partner on here... from this post actually!! We're currently in talks and searching for a potential flip.

And then even more funny enough.... we're now in negotiations for a buy and hold multifamily with my original investor!

Things are working out! I think I need to be more open and honest with people about what I want, what they want and how the relationship can be mutually beneficial.

Anthony McEvoy · Answer

@Kiersten Vogt: So what did you end up doing?  You cut ties and move on?  It must be tough being family.

Kiersten Vogt · Answer

@Gilbert Dominguez you are right!!! Yes I want to be running a business and I'm not. Thank you!

Kiersten Vogt · Answer

@Andy Mirza I think I do know the answer... thank you for the advice.

Andy Mirza · Answer

@Kiersten Vogt I think you already know the answer: Find another investor.

Lots of people do a lot of talking but when it comes time for action, many are no where to be found or they do like this investor and come up with excuses. Either she doesn't really invest or she just doesn't want to invest with you for whatever reason. Either way, find someone else who wants to do business with you. One sign of a good partnership is that it's easy to work with each other. You might go through several partners before you find the best one but keep searching until you do.

Anthony McEvoy · Answer

@Kiersten Vogt: Another approach is for her to tell you what she wants.  Ask her what is her ideal property to flip.  Also, have her prioritize what is truly a big deal and what is not.  For instance, she may prefer a house that is not on well and septic but if it meets every other criteria, she would entertain it.  If she has interest in different geographical areas, then make sure her wish list is the same for all areas.

Providing some more background may help generate more ideas on what you can do... How many have you done with her?  What price range are you typically finding these deals in?  Has she always been this way or did you get lucky the first time or two?

Frustrated with Investor... What next?!?

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