Hierarchy
I wanted to do the rehabbing venture a little bit different than most. I want to actually hire an appraiser, contractor and real estate agent. Together we would all come up with the best possible scheme to profit. Although this may get a bit costly i want to know if the sound s like a good idea.
What do you mean hire? Are you talking about a 3 way partnership with splitting of the profits? Hiring those people is no different then what everybody else does the exception being when in the process they are 'hired'. Please explain with some details.
Kind of like a 3 way partnership only difference is that we wont split the profits. I want all of us to interact so everyone is one the same page and everyone knows each other and know each's position. It will be an informal partnership since they will be paid based on a set fee.
The current system works, if you work it.
Find an agent you like, use as needed.
Likewise with contractor.
"Together we would all come up with the best possible scheme to profit."
Seems to me they provide that function by doing their jobs competently.
"The pioneers get all the arrows." I.e., the reward for being first into a new region.
IMO, you should consider the possibility that your "partners" may determine they are delivering more value to the "partnership," and desire more $$$ from the profits.
[addsig]
Re: I want to actually hire an appraiser, contractor and real estate agent..
Sounds like a bad idea.
What will the appraiser do? Tell you the value of a property? You should be able to do that yourself if you want to be invloved in rehabbing. Determining what you are willing to pay for a property and it's potential resale value should be the easiest part of the job.
What will the real estate agent do? Find properties for you? That's called a buyers agent and there's nothing new about that. Having an extra real estate agent in the deal put's you at a negotiating disadvantage because now the listing agent has to split the commission with someone else. You are always better off dealing directly with, and only with the listing broker/agent. With the advent of the internet, finding potential rehab properties on your own is now easier than ever.
A contractor? What will he do besides all the work?
If you are not a do-it-youself rehabber, the contractor is the only worthwhile party in this equation IMO. The other stuff you should be able to do yourself. Otherwise, where are you adding value to your venture?
Hiring an appraiser? Scheme....not good. An appraiser will come up with the true market value based on all factors. Ethically and legally, an appraiser cannot and should not sign-off on any appraisal that they personally have an interest in. Be very very careful, you and your entire team could be wearing orange jumpsuits for a few years to come.