House Flipping with a Partner - How does the process work?

[Osvaldo Cabrera]

Hello,

I am a new real estate investor located in Miami. I am about to get into my first real estate deal, which will we a flip. I will be partnering with a local guru in order to get my feet wet and learn beginning, middle and end of a house flip. I won't get into the specifics of the actual deal itself, that has already been properly analyzed by both my partner and I. What I would like to learn, more specifically, is how the transaction takes place when you have a partner. Here are some of my questions about this topic:

• How does the gathering of funds occur? E.g. If I put down 50% and he puts down 50%, where and how do the funds join together and get transferred for the purchase.
• Once the house is purchased, what costs must be taken into account? Obviously rehabbing costs, eventual closing cost at the time of sale, but what else to factor in?
• Once the property is sold, how is the profit collected?
• What things should I watch out for?
• Are there any legal paperwork steps to take to avoid a bad outcome?

Your answers and feedback are greatly appreciated!

[Gay Lloyd]

Good advice above!  Operating agreement is a must.  Holding costs are real.  We always  try to run through an escrow or 3rd party company to protect everyone.  We would suggest constant communication and review of budget status as you go along- weekly at minimum.  Wise to start with experienced person to learn.  Good Luck !