People Ask Me To Sell Their House
I am cleaning up a quazi landfill (it is very expensive) and two of the heavy equipment people I have talked to have asked if I could help them sell some property they own. I am not a realtor or broker. How can I help them sell and still get paid for helping them? They are just people who don't know how to do it themselves.
Josh
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Why not put the property under contract with the sellers and then go ahead and sell that contract to an investor that will do something with the property?!?
Good Luck!
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Matty Kling got a good point here and I hope he will be so kind and technical to explain the above poster what papirwork should be used and how this entire process works.
Quite frankly not everyone who has a house to sell qualifies for our services as an investor.
I work closely with realtors and refer them a LOT of business. A close relationship can have many perks, including access to the MLS, conservative BPO's, etc.
Do you want to be a realtor or an investor???
Just for the reason that I want my JV partners very comfortable with our JV agreement, I almost always make appt with a biz lawyer, take the partner with me, and together we craft the agreement we both want and are comfortable with.
Can you DIY? Of course.
Is it the best way? Depends on partner's comfort level & how much trust is really there. And how much you know about p'ship forms, good legal doc. drafting, applicable law, problem areas to address, etc..
Have I done them myself? Of course, but I am lawyer with lots of years experience with RE deals and p'ship agreements (good and bad), so I have a big head-start.
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Thanks for the reply. I tried a clause where I would forfeit (up to, but not exceeding) my end of the profit for him to finish the project. He's wanting something more like a monetary penalty. I was thinking of a completion bond. Is there a bond or something like that available for non-contractors?
Surely SOMEBODY on this forum has run into this! Any ideas would be appreciated!
Performance bonds do exist but they are designed for larger deals generally. I have not tried to price one for a rehab project so I am not sure what you will find. I am used to them as they are required when you bid on computer projects for the government.
Call around to see if you can get any leads for providers.
How much is your partner suggesting. I would not call it a penalty and if that is what they really want then maybe they are not such a great partner. If there is a death then you want to find a way to get the project done. A penalty is for bad behavior and there is nothing you did in this case. Maybe they have a different concern or a different objective.
John
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Well there are sorta two parts to this question and the answers are different:
1) what if you get hit by a bus?
2) what if you fail to perform because you loose interest.
Relative to 1) I have, on occasion made life insurance part of the deal. A one or two year term policy is pretty cheap.
Relative to 2) a monetary penalty is entirely in order. Assuming that you have convinced the investor that you are able to renovate the property more cheaply/more efficiently than somebody else it is appropriate for him to ask you to pick up the added cost if you fail to perform.
Thanks John, Active and Commercialking for all the advice. I will try (A) finding a RE / biz lawyer and buying some of his time. I don’t mind paying for good advice. (B) locating a vendor for surety bonds , or something like that and /or short term life insurance(C) talk to the investor and find out what would ease his concerns. If I were in his shoes and was going to write a check for close to a mil, I would probably be cautious as well. In our last conversation, I think he was most concerned with the (remote) possibility of me “loosing interest” and bailing on the project and not so much the “hit by a bus” scenario. He mentioned the monetary penalty and seemed to want a $ figure that would make me think twice before walking. Commercialking, are you suggesting that I agree to pay out an amount not to exceed X $’s to complete the project or a specific figure (say $10,000)?
The deal is a large 2 story frame pool home in a prestigious waterfront neighborhood, that is in need of makeover. Purchase price is around $600,000 with a projected rehab cost of $70,000. (Low) Market Value after rehab is around $900,000. He puts up all the money (cash) for purchase and rehab. The house will be in his name only. I find the house, perform / manage the rehab and market the home when it’s done. We split the profits 50/50.