Experienced Flippers: What Should I Have When Pitching You a Lead

[Corey Schaecher]

Alright experienced flippers that are kind enough to partner with newbies - how much information do you want from a potential newbie partner when they're pitching a lead on an off-market deal from a motivated sller, i.e. - how much diligence should they have done before approaching you; what numbers should they have, if any; should they have started negotiations with the seller; what information/stage of the deal do you expect them to be in when they pick up the phone or sit down to e-mail you before you'll start partnering. 

The good news is - i have a potential lead on a motivated seller The bad news is that my personal capital is tied up on another flip that was an MLS deal for another 6-8 weeks. So i don't have (1) access to my own cash or (2) the experience on negotiating an off-market deal with a homeowner.

Following the solid @brandonturner advice, i tell people i have rental properties and am always looking for more.  A work acquaintance contacted me and said that their dad owns his house outright, he really wants out of it, that it needs a lot of work, he doesn't want to do the work to get it ready to sell, and is willing to sell it for below market.  Her dad knows that I might be able to get him cash in a few weeks if the price is right and he is "very excited" about the prospect. 

Is this enough info to call a local, very experienced and well-funded flipper and offer a partnership on the deal if it can work, or do i need to make sure it can work first and provide numbers, photos, comp data, repair estimates, etc.?  I am not an expert in this specific neighborhood, true comps are tough to come by, and I'm still very green as far as estimating repair costs.  

So: is this enough to start the ball rolling on a partnership or do i need to do more before i reach out?  If so, what else should i do?

[J Scott]

Speaking for myself, it doesn't matter how much work you've done to this point, as long as what you expect in compensation is commensurate with the work you've done.  In other words, if you have a lead (but not a signed contract), I wouldn't expect to give you 50% of the profits on the deal -- though I'd give you a finders fee.  If you had a signed contract that you were assigning, I'd be willing to give you a much larger fee -- and likely a cut of the profits if that's what you preferred.

Basically, the closer you get the deal to finalized, the more you should ask for.  If you're still basically at square one (you have a lead, but you haven't spoken to the seller directly), don't expect a tremendous amount.  Though these days, that's still valuable enough to get a nice finders fee.