Ever read The Art of the Deal by Donald Trump?
One of the most fascinating things I have ever found about real estate investing is found in the fact that you do not need to be the buyer or the seller to make money. How, you might ask?
There have been times in my life that the people I have looking out for a good deal for me are too productive, they find something really attractive, a motivated seller or whatever, but I just can not get the deal done. Maybe I am involved in too many at that time, maybe I just dont want to touch a deal of that size, whatever.
But I do not want to pass up a chance at some extra cash, so what can I do? Easy, I look to my list for another buyer/investor. If you want to make money, you need to develop a list of like minded people over time.
By checking my list I can usually pass the deal along and pocket a finders fee (helps me to pay my bird dog for finding the property), or, if they are really good friends, pass it along for future considerations, knowing they will return the favor.
A typical deal would look like this:
I get a phone call telling me about a property, motivated seller and available for at least 25% below market in order to get the deal done quickly
After listening to the details and determining I can not do this one deal for whatever reason, I make some notes and go to my list.
I explain to one of the other buyer/.investors on my list all of the details of the property and agree to share the address, etc in exchange for either a finders fee (usually enough to pay my bird dog plus about 10%), or to pay the original finder for me and a promise of future consideration
It really is that simple. Share and receive.
I would, of course, make an effort to not share my bird dog information with the other buyer (they are a hard commodity to find). Also, do not share with the finder that you are passing on the deal. Thank them for the efforts and if it results in a purchase, pay them the money.
Good will goes a long way in real estate investing.