Have motivated sellers & can't take down the deals, please help!

Have motivated sellers & can't take down the deals, please help!

Real Estate Broker · Los Angeles, CA · Member since 2018 · 30 posts · 17 votes

Hello BP friends,

I have motivated sellers and can't take down the deals myself - need help and/or advice please!

Here's the situation: I just completed my first single family fix&flip. My girlfriend and I have been working on the project for the past several months, finally finished the house and got it on the market, and we're thrilled with how it turned out!

During the course of marketing the listing - holding open houses, dropping off flyers for neighbors, etc - I have come into contact with a few owners who want to sell off market. Specifically, there are two owners who I've spoken to who are very motivated to move, and don't want to list their houses on the market. They want an investor like me to make them an offer and give them an easy out. Seems like an investor's dream, right??

Here's the problem - I am heavily invested in the flip I just completed. Until this house sells and closes, I don't have the bandwidth or capital to take on another project. Unfortunately, I just don't have the ability to carry more than one project at a time yet. But, I know that I can't let these motivated seller leads go to waste. I'm looking to the Bigger Pockets hive mind to find some possible opportunities with this situation. Here are a few of my initial thoughts:

  • Should I bring in an investor who does business in that area, pass off the leads to them (maybe for a finder's fee), and let them negotiate as needed?
  • Should I attempt to get the sellers into contract, and then turn around and find other investors to wholesale the deal to?
  • Should I keep the sellers engaged, and bring in one or more partners to participate in the deal?
  • I also have my RE broker license - should I try to convert them into listings which I can market and sell for commission?
  • Is there any other angle or opportunity I'm not seeing?

Any advice on this topic would be greatly appreciated! Also, if you (or someone you know) is an active investor in the East San Gabriel Valley area of Southern California, and would like to work together in some capacity, please don't hesitate to get in touch.

Thanks in advance for your help!

Marc

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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
7y
Originally posted by @Marc Sinnott:
Hi Jay, Thanks for jumping in on the discussion! Can you please elaborate a little on your answer?
Are you suggesting that I bring in partner(s) with capital, and try to take on the deal as a flip investment?
What is your role in the deals you mentioned, where you help guys like me scale?
Apologies for the barrage of questions, as I'm pretty new to investing!
Thanks again,
Marc

Originally posted by @Jay Hinrichs:

I would be lining up a capital partner we do this all over the country .. we help guys and gals like you scale.. Not advertising for business just stating there are plenty of folks like me that does this for a living for the right situation.

I have one going in Temecula right now..

yes here is how I would do it..  I would provide all the down payment money all the payments insurance etc.. you would simply handle the utl

You would go to any number of the great HML there in socal and get the loan.. the money I front is for your down payment and the interest reserve.. so other than utls you have no skin.. that's how I do it.. then we split profit.. great deal for my folks better return for me than funding the whole thing since CA is high priced real estate.. and I am not a 8% 9% lender.. like the HML are. so lets say the project makes 100k you get 50k I get 50k.. or whatever we negotiate.. sometimes I take a pref rate of return and as little as 20% of upside .. just depends.

See this reply in the discussion

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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    7y

    I would be lining up a capital partner we do this all over the country .. we help guys and gals like you scale.. Not advertising for business just stating there are plenty of folks like me that does this for a living for the right situation.

    I have one going in Temecula right now..

  • Real Estate Broker · Los Angeles, CA · Member since 2018 · 30 posts · 17 votes
    7y
    Hi Jay, Thanks for jumping in on the discussion! Can you please elaborate a little on your answer?
    Are you suggesting that I bring in partner(s) with capital, and try to take on the deal as a flip investment?
    What is your role in the deals you mentioned, where you help guys like me scale?
    Apologies for the barrage of questions, as I'm pretty new to investing!
    Thanks again,
    Marc

    Originally posted by @Jay Hinrichs:

    I would be lining up a capital partner we do this all over the country .. we help guys and gals like you scale.. Not advertising for business just stating there are plenty of folks like me that does this for a living for the right situation.

    I have one going in Temecula right now..

  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    7y
    Originally posted by @Marc Sinnott:
    Hi Jay, Thanks for jumping in on the discussion! Can you please elaborate a little on your answer?
    Are you suggesting that I bring in partner(s) with capital, and try to take on the deal as a flip investment?
    What is your role in the deals you mentioned, where you help guys like me scale?
    Apologies for the barrage of questions, as I'm pretty new to investing!
    Thanks again,
    Marc

    Originally posted by @Jay Hinrichs:

    I would be lining up a capital partner we do this all over the country .. we help guys and gals like you scale.. Not advertising for business just stating there are plenty of folks like me that does this for a living for the right situation.

    I have one going in Temecula right now..

    yes here is how I would do it..  I would provide all the down payment money all the payments insurance etc.. you would simply handle the utl

    You would go to any number of the great HML there in socal and get the loan.. the money I front is for your down payment and the interest reserve.. so other than utls you have no skin.. that's how I do it.. then we split profit.. great deal for my folks better return for me than funding the whole thing since CA is high priced real estate.. and I am not a 8% 9% lender.. like the HML are. so lets say the project makes 100k you get 50k I get 50k.. or whatever we negotiate.. sometimes I take a pref rate of return and as little as 20% of upside .. just depends.

  • Flipper/Rehabber · Atlanta, GA · Member since 2019 · 5 posts · 0 votes
    7y

    @Marc Sinnott Hi! I would definitely try to go ahead and wholesale the properties since the sellers are motivated. I am a wholesaler & also a licensed agent, so I understand all points you’re trying to consider. I honestly wouldn’t try to convince them to lost the properties after they have emphasized they don’t want to put the properties on the market. Why not wholesale and make a profit and save that money to invest into a new rehab.

    **I do have a long Investors List, so please let me know if you’d want to work together on this.

    Brianne

  • Flipper/Rehabber · Atlanta, GA · Member since 2019 · 5 posts · 0 votes
    7y

    *List

  • Wholesaler/Investor · Dallas, TX · Member since 2018 · 260 posts · 222 votes
    7y

    @Marc Sinnott

    A couple of out of the box options.

    1. If your sellers are not cash motivated, see if they will "lease" the property to you for "X" months, and make I/O payments to them. This will buy you the time necessary for you to free up your funds. If necessary, lease the property out to cover that I/O payment.

    2. If your sellers are not time motivated, offer them an Equity Partnership in the deal. This will save you the funds to actually purchase the property, and only provide the funds to renovate, saving you 10s or 100s thousands, whichever. 

    John

  • Investor · Oxnard, CA · Member since 2014 · 438 posts · 187 votes
    7y

    @Marc Sinnott

    Since you are a broker, I would give them a seller net sheet (or whatever your office calls them) to show how much they can pocket if they list their house with you and I would also present them a cash offer for you to buy directly.If you explain the pros and cons of each, maybe you can find a win-win where you help them reach their goals and you're able to either earn a commission or buy/wholesale a house.

    In my experience with our Southern California market (Ventura County) over the past few years, homeowners may seem "motivated" until they see the price. My guess is they want an offer and an easy out, but not an offer at 70% or 80% ARV (or whatever number is being used to analyze a deal).

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