Posted by B.L.Renfrow on September 06, 1999 at 11:40:16:
As an investor relatively “wet behind the ears” myself, I’ve been inclined so far to avoid properties being offered by other, more experienced investors. I figure that if they’re selling, they probably know something about the property which I don’t, or there’s some problem; otherwise why would they be selling?
Of course, I realize there could be legitimate reasons, but I prefer to buy from motivated homeowners, not other investors.
I was approached a few months ago by an investor looking to sell all (10-12) of his rental properties - gave the “tired landlord” excuse. However, the guy’s not only an investor, he’s a lawyer, and has a reputation in the community for being rather shrewd, so I passed. Did I miss a good deal? Who knows? Just too many risk factors for my comfort though.
Of course, if you do decide to examine the deals further, make especially sure you do the due diligence, then double - maybe triple - check all the numbers.
In general however, especially for a newbie, I’d say you’re not likely to find particularly motivated sellers (and therefore profitable deals) from experienced investors. If anyone has other opinions, I’d be happy to hear them.
Is it a no…no, to deal with other investors. For instance if a investor attempts to sell you a house. Should I try to inquire or just leave the property alone?
Re: Dealing with other investors - Posted by keithk2
Posted by keithk2 on September 06, 1999 at 12:02:55:
It’s not only perfectly alright to buy from another investor, it’s done all the time. Many investors simply “flip” properties to other investors. For them, it’s a quick, easy way to make money on a property that has a good deal of upside profit potential but might have more work involved in getting it ready for resale than they’d like to do.
I started out by flipping houses to other investors. It didn’t require any money and they were happy with the profit opportunities I found for them. I would tie a house up with a purchase agreement and then sell my interest to the investor for a couple thousand dollars or so.
If you maintain contacts with other investors, you’ll also have the chance to make a profit off of deals that you find that you don’t want to do yourself. Just tie it up and offer it to whoever is looking for that type of deal.
Re: Dealing with other investors - Posted by Eric C
Posted by Eric C on September 06, 1999 at 11:47:52:
Hi -
I get a lot of my properties through other investors. Sometimes, they own an interest in the property,and at other times the property just doesn’t fit their “niche”. (meaning they’d like a finder’s fee)
“Burned out” landlords are a favorite of mine. If you’ll learn to do your “due diligence” as you should for EVERY deal, it doesn’t matter where the properties come from.
I also buy a lot from banks, insurance companies, etc. They can all be just as “motivated” as any homeowner in trouble. They may just be motivated for different reasons.