I was enjoying another summer day up at a cottage with my family, when I received a voicemail. It was one of my tenants calling to discuss a friend who needed to sell his house ASAP.
If you’re wondering why my tenant might be calling me regarding a house for sale, it’s because I do my best to let everyone (within reason) know that I am looking for houses to buy. I often wear my RealABUNDACE branded T-shirt with the words “We Buy Houses” displayed on the sleeves, and the phrase “Financial Freedom through Strategic Real Estate Investing” on the back because it’s a great conversation starter. The more frequently people remember me as the “house buying guy” the more likely they’ll think of me when an opportunity shows up.
GOLDEN NUGGET: Advertise to your current tenants!
Each unit that I rent out comes with a Tenant Binder. This is a great place to put property information, house rules, etc. but I also use the binder to advertise that I Buy Houses. Right in the front cover of each binder is a full colour, laminated advertisement, which clearly states that We Buy Houses and we offer a $$$ referral bonus to any lead that we end up acquiring.
It turns out this seller had acquired too much debt, and was only a few days away from losing his house. A real estate agent had already informed him that he wasn’t likely to receive the price he needed within the time allotted, and it seemed like bankruptcy was in his future. A quick flip alone would likely result in a loss, and I wouldn’t recommend it to any of my investor clients. However, closer examination revealed some creative opportunities or Hidden Wealth Options Within this Real Estate Deal:
1) The property had characteristics suitable for adding a basement apartment. If an investor spent the money, and kept it as a long term buy and hold 2-unit, the ROI would likely be quite good.
2) The property had 60+ feet of frontage and the house was positioned primarily to one side of the lot. A sophisticated investor could sever the lot and sell the 2 properties separately for significant profit.
3) An investor/builder could convert the SFH into a 2-unit (rent or sell), AND develop/build the second lot (maybe also into a 2-unit) and rent or sell it.
I felt someone in my network could likely unlock the hidden wealth in this deal and at the same time save the seller from going bankrupt.
Now, I was 3 hours away at a cottage, and didn’t want to sacrifice my family time for a lead that may or may not pan out. So I called my friend (and often mentor) Ryan Carr to explain the situation. Ryan is a rock star real estate investor, contractor and builder (rwcarrinvestment.com) who has proven himself as highly competent with a tonne of integrity. I mention integrity here, because I believe it’s one of the main ingredients to being successful in this industry, and you’ll see why in a moment.
Ryan visited the property in under 24 hours and locked it under contract.
Upon returning from my cottage vacation, we sat down and had a conversation about which path we might take as Joint Venture partners (considering the 3 options from above). After some careful consideration, we decided that an “easy” assignment fee was my best option, and Ryan could tackle the project on his own.
Two Important Notes:
#1 Ryan and I didn’t have a signed LOI or legal contract protecting my interest in this deal. Instead we had cultivated a strong relationship built on trust and helping one another succeed. INTEGRITY.
#2 People might question, “Aren’t you concerned Ryan will make $100,000+ and you only gained a fraction of the potential profit?” The answer is absolutely NO. I strongly believe Ryan will make tonnes of profit on this. A Win for a client is also a Win for me. We grow together. Ryan will need to invest a lot more of his money and his time before he’s eventually able to recapture the profit. There’s risk. My option is much less profit, but no risk. Considering my existing investments and ongoing projects, the quick payout made sense this time.
Newbies, there IS light at the end of the tunnel, and your hard work WILL be rewarded! Just keep on Grinding! Deals are all around us, we just need to cultivate an ABUNDANT mindset and know where to look!
If you’re ready to start creating Serious Long Term WEALTH, then lets go find some Deals together! I am both an active Real Estate Investor accepting select investor Joint Venture partners, and an Investment Focused Realtor who can assist you with your Buying and Selling needs. Please DM me for info or shoot me your email to be added to my deal list!
Stay ABUNDANT my friends!