John and I met through networking on Bigger Pockets. I was new to Columbus. My family held a few campus rentals in Kentucky and had flipped a couple houses. While looking for properties on the MLS, we found there were not many good deals. So, upon hearing John was finding them off market I asked him to share any he found with me. The first deal was a campus rental. I was familiar with this so it was an easy sell. We bought it for $135k and it needed about $3-$4k in work to one bathroom. The rent at the time was $1,800/ month. We raised the rent to $2,200 and held on.
The next deal John brought was a little house on the south side that we still hold. We paid $30k for it and put about $15k in. It rents for $1,100 a month. These two experiences began to solidify our partnership and I began to share marketing expenses with him so he could find more deals.
After a number of deals and experiences together, he started putting money into the deal and we were splitting the profit. With so much success and his desire to leave his cubicle we formed a partnership and rented an office. Since that time we have done hundreds of deal and our business has grown exponentially. We have hired and trained people to help us.
Our strategies have changed and evolved. It has been a fulfilling journey to this point! As we considered partnering together, our experiences have guided us. This is what we learned:
- I did not beat him up on price (too much) when he was wholesaling to me. This is important. I was new to Columbus and had spent 6 months looking for deals only to find they were not on the MLS. John had a goal to leave his day job and work in real estate full time. If I would have taken advantage of his situation, it would not have helped him get there and it would have driven him to find other buyers.
- Work together slowly. Taking it slow in the beginning saved headaches in the future. I bought several deals from him as a wholesaler before I started adding money to the marketing. This allowed us to send out bigger mailers and increase the number of leads. Then, having him add money to the actual deals themselves further confirmed to me his commitment to the long haul.
- Communicate clearly. John and I both learned quickly to speak freely, honestly, and respectfully. We worked together on finding comps and making offers. We drove to leads together and analyzed rehab costs. Above all, we treated each other with deference and respect. There were times when a house would sell and we would have a debate about what was fair as far as a wholesale fee. This came up because we would structure our deals in ways that took into account if it sold for more than we expected it to, which was often the case.
- Integrity. Honestly, this is the first thing I looked for. During my interactions with John, I could always tell he was dealing with full integrity. Over the course of our time together we have had many discussions about making fair offers. Knowing the market better than most sellers puts us at an advantage. Even when we may have been able to get a deal for less money, he is always advocating for the seller. Wrestling with treating people fairly versus profiting for the business can get sticky when there are bills to pay.
When I was considering a partnership for the long term, knowing that John erred in favor of any seller was a huge win in terms of considering a long term partnership. Initially I was hesitant to partner with a “stranger” mostly out of fear. Today, we have 100+ rentals and are flipping 40+ deals a year. We have 4 employees and are growing as fast as we can!
To find out more about us and our business you can listen to our podcast or join our email list to get updates, tips, and industry secrets right to your inbox. You can also learn by going to the JohnBuysHouses.com website to learn how we value a property, what we do with the property, and how we can help.