Disclosing Price
1. When attempting to flip a property to a rehabber do I (should I) reveal to him/her what I am getting the property for? Seems to me that would be a bad idea unless that's something that I legally have to do.
2. After complete such a deal with a rehabber/investor, what is the likely hood of repeat business with them? Seems like it could be a win/win if you could find a couple "go-to" rehabbers, and then whenever you contract a distressed property flip it to them. In a sense bird-dogging for them, kind of? Does this 'relationship' happen often?
Depends on how much money you're looking to get out of the flip. Rehabbers like myself have to think about what we're going to get out after doing all of the work. I like to buy as low as possible. If you bought the house at say 30K under value and you want to flip it and get 10 or 15K, that doesn't leave much for me after I buy it and od the work. I think that you'd have to get a really great deal for both you and the rehabber to make a good profit. It may be doable depending on the numbers. In my area of the country an average house is valued at 90-110K and that's if its in good shape. So if I can find one for 55K and think that I can sell it for 75-80K that's a good deal for me. If you get it for 55K and sell it to me for 65K, then it isn't going to be a good deal for me. I hope I explained okay. Also, you don't have to say what you paid but if the rehabber is smart they'll know how to find out anyway. It's public record available to anyone.[ Edited by Sandbahr on Date 01/15/2004 ]
If you were to present me with a deal that falls within the parameters that I use for investing, I would gladly pay you any difference between what I find acceptable to make on a deal, and what you paid for it. On the other hand, If you're not leaving enough in the deal for me, I'll tell you. If you're into it for more than I'm willing to pay then we won't do business.
I am a firm believer that if the deal is a win-win-win, that it's best for all parties involved.
If I know you're clearing 15K on a job that you've done with me, I'll pay you with a smile, and make you eat my dust trying to find the next one.
In AZ double closings are legal, as long as full disclosure happens. Everyone involved with the deal knows who's scratching who's back and how hard.
If its more than $10,000 and you don't trust that investor or thinks he or she maybe shady, I would do a sim. closing and not make them aware of what I'm making on the deal. I usually have a heart to heart with my investors and let them know up front that they should not focus in on what I'm making and if they have a problem with me making a healthy profit on the deal to go out and find their own deals. If I feel that they are shady, I will not work with them. If I am not sure about them and end up getting burnt by them, I just end the business relationship and let every investor I know of in that area to steer clear of the shark and then move on with my life.