I'm a Nor Cal RE newbie trying to get my first deal under my belt. FYI not an agent, and I appreciate in advance any well wishing lamentations of those who might strongly feel that I should become an agent after reading this. I've been trying to wholesale and have learned a good bit about the theory and tools behind off market marketing/deals. Very recently I've learned through an agent that there's an off-market 4plex who's owners want to downsize locally into a duplex. The agent can't find anything on the market that works, so I figure I'll put on my hustle hat and see if I can find one that nobody's wanted to sell, but I don't want to look/walk/talk/sound like an agent.
SO
I'm trying to structure this as some sort of partnership where I talk about the off market 4plex and how I need a partner with a duplex that wants to upgrade. I can bring about 20k to the deal, but really I'd rather just cut myself out of the deal, keep my money liquid, enjoy the privilege of the experience, and move on to my next deal. My initial instict is to get the first property under contract, assign it to a buyer with a duplex that they would put up as sort of an equity trade, and move on. But I realize that I might need to think outside the wholesaler box on this one.
Their 4plex needs work. The words 'dry rot' were mentioned but I didn't see any when I gave it a walk around. Pictures from the inside show popcorn ceilings and *uuuuhhglyy* linoleum. It's on a crummy looking street in a good area (half the surrounding properties made my budding wholesaler Spidey-sense tingle), a healthy but not unreasonable bike ride from a strong tenant draw and stumbling distance from nightlife. Mom and Pop manage it, with their motivation to sell being health and age related. Rents are undervalued due to differed maintenance. Tenants are good, stay for years, and likely don't make waves because the rent is cheap.
My questions are as follows:
Can someone put a house into escrow as a value/equity trade? Would the duplex need to be liquidated first?
Is there any way for me to get a quick turnaround on this deal other than assigning the contract? Quick being in the next six months. If I put 10k into the deal and had my partner buy me out at closing, how much riskier would that be relative to the added legitimacy?
I'm still networking to find a potential partner. I figure I would just be careful about how I talk about the place, always mentioning that I'm in talks with a buyer and a stipulation to them giving me the contract is that I bring them a duplex. Does that sound kosher?
One of my concerns is the 200k owed on the place. I don't know if it's a reasonable concern or not, but it limits the people I can approach to partner with in this deal. Many duplexes are market valued within 200k of the current value of this fourplex.
Thanks for reading!
