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Updated about 16 years ago,
Recent deal hunting
happy halloween and happy deal hunting (or haunting). Sorry I just had to make a stupid halloween joke. black and orange supermarket party decorations and cake icing, etc...
The following scenario is beginning to play out:
I contacted a few rehabber guys from the newspaper who had ads like: we buy houses any condition cash! 2 of em were there and seemed like nice guys and open to deal making.
I was driving along and saw an FSBO sign, called it and got a guy who's also an investor/wholesaler but, in contrast to the other 2 guys, deals in more high end stuff and in higher volume. claims he deals with 60 houses at a time sometimes. I asked if he had any fixer uppers. He said yeah and gave me addresses of 2.
I went and looked at them and they seem great - decent houses in nice neighborhoods, easily as big and in same style as others near it, need rehab but not so much that they're real wrecks. Took a look at all the numbers (got comps, had a real estate agent send me little reports on them, all that) and they don't check out. Not enough room. Except of course for the big investor dude seller who makes 40 to 50 grand either way. One house he wants 155k for and probably paid say 110k. Assessed at 192k, so fixed and put on the market he gets maybe 195 to 200. Rehab costs on both he estimated 30 to 40 k.
So if he sells it to me or one of my rehabber contacts for the 155k, 45 k for him (well ok maybe some holding and closing costs subtracted out of that). If he fixes it up himself, 55 k (110k + 30k rehab=140k and he's selling it for say 195).
So he's got not much to lose and not much motivation for coming down in asking price.
And as far as I'm concerned, there's not much room for me to get a modest bird dog fee or even offer my rehabber buddies a reasonable deal.
I was just wondering, from a strategic point of view if anyone had any ideas on how to turn this into a better situation for all concerned (especially me and the small rehabbers!). The seller investor does have a lot of properties and seems in certain ways open to deals, seems to mainly just want to move the properties. these fix ups are classic good deals if I was to get them at the right price.
Will
p.s. I'm also wondering in a general way how to get these smaller rehabbers to want to do business with me. Any ideas on how to find fix ups that others might have missed? Other types of deals and advantages I might offer them? Also how to get them to pay me the finder fee up front rather than after they resell? Any thoughts appreciated I'm new to this.