Newbie investing 10K with Flipper

Newbie investing 10K with Flipper

Member since 2018 · 7 posts · 0 votes

Through normal conversation with strangers I met a guy that flips home in my area. We exchanged information and went about our way. I mentioned this to a friend of mine that is a HVAC contractor and he says he has done work for him in the pass.

I met the guy for coffee and he told me he was doing 6 flips right now and does a lot to help newbies whenever he can. He gave me an example of one newbie investor that invested 10K and got 16K once the home was rehabed and sold. All the while gaining knowledge of the processs. He offered to help if I was interested. He mentioned he is always looking for deals and if I wanted to invest he will partner with me.

My question - (Being a Newbie) If I have 10K to invest how would you'll approach this situation? How would you determine if you would partner with him? What are some questions I should ask? If you decided to partner how would you structure the partnership? And any other suggestion would greatly appreciated.

Keep in mind have read a number of books related to real estate and have a fairly good understanding of the topic. I feel like its time to for me to get in the game now and wanted some advice on if this is a good way to get started.

Thanks in advance.

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Specialist · Riverside, CA · Member since 2015 · 6k+ posts · 3k+ votes
7y

I would run. If it sounds too good to be true it probably is, why would this guy offer a 60% return to a newbie, when he could borrow from a HML at 12% this does not pass the smell test to me. If you proceed be extremely careful, I might even look up properties that he owns in the county records so that you know there would be something you could go after if legal action was necessary.

Overall this feels incredibly shady to me.

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  • Specialist · Riverside, CA · Member since 2015 · 6k+ posts · 3k+ votes
    7y

    I would run. If it sounds too good to be true it probably is, why would this guy offer a 60% return to a newbie, when he could borrow from a HML at 12% this does not pass the smell test to me. If you proceed be extremely careful, I might even look up properties that he owns in the county records so that you know there would be something you could go after if legal action was necessary.

    Overall this feels incredibly shady to me.

  • Member since 2018 · 7 posts · 0 votes
    7y

    @Aaron K. Thanks for your response. That example he gave raised my eyebrows when he mentioned it and turned me off a bit. I was thinking maybe even breaking even but gaining tons of knowledge. So I do understand why you would be a skeptical.  

    Partnering with this particular flipper may not be a good idea but do you have any sugestions on how I should approach a more experienced investor on partnering on a deal to get my feet wet and gain some hands-on experience?

    Thanks

  • Flipper/Rehabber · Montgomery, NY · Member since 2016 · 2k+ posts · 1k+ votes
    7y

    Have him provide you with 4-5 beginners who invested $10k or so and made their money back and more. Reach out and ask them about him (referrals). It may be a real good deal, or not. I would dig a bit deeper and go from there.

  • Member since 2018 · 7 posts · 0 votes
    7y
    Originally posted by @Brian Pulaski:

    Have him provide you with 4-5 beginners who invested $10k or so and made their money back and more. Reach out and ask them about him (referrals). It may be a real good deal, or not. I would dig a bit deeper and go from there.

     Thanks Brian, thats great advice. I'll dig a lot deeper and and find out more about him. I was thinking of asking to see some of the current deals he is involved in. Maybe walk some of the properties with him or something also. 

    Would it be to invasive to ask him to share the numbers on some of these current deals? I figure I will get a better understanding of if I even agree with the way he analyze his deals. 

    Im not really sold on working with him. Im more concerned with how to invest my money with any seasoned investor since its such a small amount....or should I invest with another investor at all...

  • Specialist · Riverside, CA · Member since 2015 · 6k+ posts · 3k+ votes
    7y

    @Corrie Allen I might not try and invest that with someone else at all, however it may be better to be a lender rather than a partner that way you may have recourse if things go south.

  • Member since 2018 · 7 posts · 0 votes
    7y
    Originally posted by @Aaron K.:

    @Corrie Allen I might not try and invest that with someone else at all, however it may be better to be a lender rather than a partner that way you may have recourse if things go south.

     Wow! Now thats a different way of looking at it. Thanks for suggestion a different approach that I never considered. 

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