Doug Pretorius (ON) 9 Report post Posted March 10, 2009 I'm not sure how I got on their mailing list but I've been getting a few deals emailed to me by some investment group. From what I gather it looks like they sign an option on a house, locate a t/b for it, and then assign the package to an investor who comes in with cash or bank financing. I wasn't paying much attention to the previous deals they sent since I'm looking for creative purchases. But I took a closer look at the latest one and ran the numbers. Based on the ROI they're claiming it looks like they are not getting the houses at any sort of discount, or if they are, they're handing that discount over to the t/b not the investor. Still, I'm sure the numbers look pretty sweet to anyone who's used to the usual crappy CAP rates straight rentals dish out. I emailed my interest for more info but got a reply a few days later that the deal has been assigned and encouraging me to get onto the list for investors with mortgage pre-approval and $3k in certifiable funds because their main list contains over 6,000 people. Probably a load of crap, but whether or not this particular group is legit or not is beside the point. The numbers can work for those of us interested in setting these deals up for cash investors and I thought I'd give it a try with some sellers who aren't willing to do a CA themselves. The advantage over regular CAs is that you don't need motivated sellers. The downside is you're adding a 3rd party (the investor) which complicates things a bit. Share this post Link to post Share on other sites
MichaelC 160 Report post Posted March 10, 2009 It has promise, Doug, but I suspect putting the theory into practice might be difficult. First you need to get an option on a property at an attractive enough price to in the end you can find a cash buyer to come in. And in the middle of this you'll need to find a t/b and place him in the property. Too many layers for me, or am I missing something? Share this post Link to post Share on other sites
Doug Pretorius (ON) 9 Report post Posted March 10, 2009 No question about there's that extra layer of bringing in an investor to buy the deal from you. But those of us still not swimming in desperate sellers it might be something to look into. I get quite a few sellers who say: "I can't do a lease purchase, but I'll discount the price if you can buy it out right." Those would seem to be good candidates for setting up something like this. Worst case scenario, you advertise the place and line up some additional t/bs for your other properties, so you really don't have anything to lose. Share this post Link to post Share on other sites
MichaelC 160 Report post Posted March 10, 2009 I agree it's a low risk proposition with limited downside other than your time and marketing expense. Share this post Link to post Share on other sites
PokerNutter 0 Report post Posted March 10, 2009 I did something similar last december. I first found tenants and then had them choose a house in an area they liked. I got it at a modest discount and found investors to come in and buy the house, leasing it to the tenants I found. I took a fee upfront and also a portion of the cashflow as I`m sticking around and managing the deal. It was hard to find investors as I didn`t have a lot of experience and that was probably the hardest part. I think it is a great idea to employ in an area that isn`t saturated with motivated sellers (read: Canada lol) and if you have a binder showing how many deals you`ve done, then winning over investors should be easier. Actually I know of a few people doing just that and they are inundated with investors it seems. This was in your neck of the woods btw Doug..KWC, so definitely worth considering. What investment group emailed you? Share this post Link to post Share on other sites
Doug Pretorius (ON) 9 Report post Posted March 10, 2009 It was from these guys: website. Not much of a site, I was hoping to find out more about them and/or see what other properties they had available, but as you can see that's not quite what I found. How did you go about finding your T/B first and getting them to pick a house they wanted? I haven't had any luck doing that. Share this post Link to post Share on other sites
PokerNutter 0 Report post Posted March 10, 2009 It was from these guys: website. Not much of a site, I was hoping to find out more about them and/or see what other properties they had available, but as you can see that's not quite what I found. How did you go about finding your T/B first and getting them to pick a house they wanted? I haven't had any luck doing that. There are advantages and disadvantages of getting the T/B first. It was a great selling point for them as they feel more involved and have more say but you have to really have motivated T/B`s otherwise you could waste a lot of time. As I wasn`t dealing with motivated sellers, they were able to browse on MLS and I had a real estate agent help them in selecting a house. The sellers paid for my agent so why not? He knew what was going on and so there has to be a level of trust b/c obviously the deal won`t go through unless I find an investor. It was a win win for everybody and I`m teaming up with another agent now trying to replicate the process. Share this post Link to post Share on other sites
Doug Pretorius (ON) 9 Report post Posted March 10, 2009 That would seem like an ideal way to go for the investor/agents on the forum. They can double (or triple if they list the house too) their take on each CA! Share this post Link to post Share on other sites
PokerNutter 0 Report post Posted March 10, 2009 Yea exactly..It seems like this group does just that: website 1 and website 2. I haven`t worked with them but this brokerage is dedicated solely to real estate investors and rent to own seems to be their preferred method. I`m sure they are double or triple dipping where applicable. I would rather do straight up CA`s or L20`s with motivated sellers but at least this way provides me an opportunity to still do a deal when sellers are scarce. Share this post Link to post Share on other sites
