Dallas-Fort Worth Real Estate Investor Club

Good morning,

I have several properties ready to go. Please call me at 469 265 6737. I need to meet potential investors prior to giving access to my properties. I have many homes for either flips or rentals. After we form a relationship I will add you to my email list for all future properties.

Mark Smithey

Mark,

Having to meet someone in person should NOT be necessary before sharing info on potential deals.  While there's nothing inherently wrong with it, the only people I've known in this business who require an in-person meeting in advance of sharing deal info have been with organizations who have earned my distrust.  Since I don't know what company you're with, I'll simply urge you to drop that requirement due to the potentially negative perception it carries with it.

If you or any one else reading this would like to discuss this, please feel free to give me a call at 817-300-1132.

Thanks,

Robin

Brian,

I'm a relationship guy, so I have no direct issue with wanting to get to know someone before doing a deal with them.  In fact, I urge people to build strong relationships with fellow investors and always look for win-win deals.  Remember... you will reap what you sow.  Unfortunately, what I've seen all too often is the following.

A supposedly experienced, successful investor whose company closes 100+ deals per month schedules a face-to-face meeting with someone just getting into the business.  During that meeting, the unsuspecting, new investor is pitched a very rosy REI business process scenario whereby great deals are served up to new investor in a very attractive package with a nice bow on top.  Thereafter, when those rosy deals are presented to the new investor, he feels compelled to write a non-refundable, $5K deposit check to tie up the deal or else his brand new best friend at the great deal factory will take him off his list.  It also doesn't help when the great deal factory rep tells the new investor as they are walking through the great deal house that "...If you don't want it, that's no problem, because there's another investor who's very excited about the deal who's scheduled to look at it about "30 minutes from now."  No pressure, right?

The short version is that those "great" deals are often not so great, and it's all too common for market values to be overestimated and required repairs to be underestimated.  The aforementioned face-to-face meetings, which I have attended myself, seem to me to be the beginning of the manipulative "pull" into so many ill-advised deals.

For the record, I'm not saying Mark is going to manipulate anybody, and, as I said, I don't know the name of his company.  Furthermore, I have no plans to mention any specific person or any specific company in this thread.  In fact, it's very much against the rules of this Discussion Forum to do so.

The proper reaction to this is not to live in fear of being deceived into buying a bad deal but:

1. Get some experience under your belt, so you can evaluate deals yourself and recognize good deals when you see them.
2. Although good deals go fast, don't short circuit the process of doing your due diligence on every deal.  Work as quickly as you can, but complete your analysis before you act.  If you lose a deal, don't worry about it.  The "deal of a lifetime" comes around about once a week.
3. Develop relationships with experienced Real Estate Investors who want to help you.  You'll find plenty of them at DFW REI Club meetings and on this Discussion Forum.
4. If the timing works out, you can do a "Thumbs Up/Thumbs Down" at a live DFW REI Club meeting.  I've gotten very valuable feedback every time I've done one.

Thanks,

Robin

I agree! Excellent explanation, something I had never thought of or experienced... Very valuable information Robin. 

-Brian 

  The issue is not with someone requiring a face to face meeting, or heck, even a $5,000 non-refundable deposit. In and of themselves, those things are fine. I've had the same experience as Robin and many others though; that people who require those things are almost exclusively representatives from a handful of wholesale firms who give severely inflated property values and whose business practices and ethics in general are shady, at best.
  However, that being said, we have to keep in mind how these places operate. A lot of them are sort of like independent franchises. While the company as a whole may be undesirable to work with, they may have an office or two somewhere that runs their operation very honestly with spot on ARVs and accurate repair estimates. Or, that may not be the case with the whole office, but maybe there's a particular rep in that office who's on the up and up and doesn't drink the company Kool-Aid. These companies are revolving doors for reps though. The ones who provide you honest, accurate information do not last. They end up getting replaced with high pressure, used car salesman types who love to prey on inexperienced investors. Sure, they move properties, mostly to newbies, but one look at the final numbers on their done deals will show most of them really weren't good deals to begin with.
  Kurt Carlton (above) may be a great person/company to get properties from. Mark Smithey (the OP) may very well be one too. Unfortunately though, because of how most companies who have requirements such as that operate, most buyers who come to you (based on that pitch) will be new with some money to burn. Which, coincidentally, is just what the shady, big wholesale companies are targeting. (Kurt, Mark, please don't get me wrong. I am not speaking about you, just about those requirements.) So we typically stay away when there are requirements like that, because, though there absolutely are exceptions, odds are it's a waste of our time and they work at a company we would never do business with.