Starting out -loaning rehab costs
I just started looking into real estate and am interested in out of state markets as California is just too expensive for me. I've looked at a couple turnkey companies but am turned off by the big mark up in purchase price. I came across a local company that does flips and has an investor program where you can lend the rehab portion and make 10% in 120 days. I'm thinking that this may be a way to start earning a little extra without taking on the issues that can come with property management. I interviewed the company and have asked a lot of questions which they've been able to answer. They've been in the business 20 years and have a lot of experience. I would hold a deed of trust and of course there would be a contract. My question is does this sound like a good idea? Also do I need to set up a small business or LLC for the profits made? Does anyone do this in California? I know there will be tax implications. Thanks so much for advising a newbie!