Investor backing out on my first deal due to pandemic..what now?

Question

I have a close relationship with my investor (family member), but as I move in on a property I can sense it may fall through because of the pandemic. Just an hour before putting in an offer I was given the “let’s think about it awhile longer”. How should I tackle this just in case the financing falls through at the last minute? This property is a steal according to my studies and calculations.

Go through a bank that might take more time?

Try to “resell” my investor on the idea? What should I say?

I don’t want to wait any longer than I have to.

Go through a bank that might take more time?

Try to “resell” my investor on the idea? What should I say?

I don’t want to wait any longer than I have to.

Jonathan Greene · Answer

Family as clients is always a disaster. One would think they would get it and trust you, but they lay the blame on you much faster than a regular client will. Any deal you are sending direct to an investor, family or not, should always have a backup investor, many times you. My off-market deal flow is high so I can't do every deal. I offer the preferred deal to an investor I know and when it's a good deal, I either know I will take it down if they don't want it or I have the next investor in mind to pass it to.

Joe Cassandra · Answer

If it's a 'steal' of a deal like you say, then you don't need your family member's help.

1) Take down the deal yourself with a HML lender (some still are lending esp on awesome deals)

2) Or, find some of the trusted wholesalers and offer to give them a cut to shoot it out to their buyer's list.

If you're set on buying the deal yourself, post it in the marketplace and you may get a private lender. Post on FB and you may get a message from a PL.

Great deals are still tough to come by, so there's money out there.

Blake Dailey · Answer

If the deal is good enough you should be able to find another investor or family member to help you with the deal. Especially in times like these, investors want a more sure return which real estate can provide so you can lean on that. It would also be prudent to talk to several lenders so you get multiple points of feedback and have backup plans in case one falls through. If you buy for right and it cash flows you should be able to whether the potential down market, just be sure to have enough reserves for a worst case scenario.

Shane Ussery · Answer

@Victoria I will say this. Your obviously intelligent. The reason I know that if you weren’t you wouldn’t be on here asking for help. You see, success isn’t a straight line to the top it’s really a lot of up and downs and some failures. You have just taken your time and get around like minded people. By reaching out on here, your talking to a lot of different people hundreds of years of experience. One way to be more successful is setting yourself up for success which your doing without spending a dime. Very smart. Your well on your way and I know you’ll be successful.

@Victoria Jacksonundefined

Victoria Jackson · Answer

@Jonathan Greene

Great to know! I look forward to getting to that point when I can’t do every deal as well. I have some other avenues I am approaching, so I will see how those go.

Thanks for the advice!

Shane Ussery · Answer

Actually years ago had a partner starting out(family member). I’m actually greatful for the experience. Imagine in 2011 in the downturn and America is in a yard sale an epic Saga. Well, that was what happened. The business model made sense most investors weren’t buying, real estate in some cases cheaper than used cars, no one wanted to buy, everyone wanted to rent. The perfect storm to become relatively wealthy in a short amount of time. Long story short we done a few deals about 6 months later we parted ways. He made way more than he put in and I ended up with 75 percent of the assets that was created today, all the cash flow assets buy sell rents is all traced back to that period. I used to try and lead horses to the trough in the beginning. Today, I’m An investor and when it comes time for Investors to do what Investors do and pull out money it’s not an issue. Why? Because if I want to buy something it’s my issue my problem. Most people aren’t willing to do that so if your looking for capital (in other words you can see it and others can’t) no need in bringing someone in for The ride you just do it. Maybe point is early on I did and tried to bring others along for the ride, good intentions, great deals. You can’t make someone something their not.

Wren Martin · Answer

@Victoria Jackson your first deal is always the most challenging and stressful.  Stay positive, look for solutions every time you run into a roadblock, and believe you can do it!  We're crossing our fingers for you.

Caleb Heimsoth · Answer

@Victoria Jackson find another “investor” that isn’t family.  Investing with family isn’t a good idea to begin with

Blake Dailey · Answer

@Victoria Jackson I think that is a solid mindset to have. As long as you are confident in your numbers and thought about the reserves you should pull the trigger.

Shane Ussery · Answer

@Victoria Jackson also I would like to add. I have saw plans come into material form from thought more times than not. You wouldn’t think it but I myself when this pandemic I stalled for a little bit myself. It’s human nature. So, this family member don’t let it get to you. The reason I can relate I myself at one time was in your shoes. Human nature is the same so that means despite wherever you are ,your experience feelings emotions is much the same. But I know it feels good knowing your headed in the right direction. You got this.Youll be just fine

Investor backing out on my first deal due to pandemic..what now?

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