Scaling to 12+ Flips Per Year/ Investor Relations

[Sam Shikiar]

We’ve completed a few flips and BRRRRs and currently own a few duplexes and quadplexes. Our goal over the next year is to scale to 12+ flips annually. Right now, we can fund 2-3 at a time with cash and another 1-2 with hard money, but to hit our target, we’ll need private capital.

Finding good deals has been the biggest challenge, but as we solve that, the next hurdle is structuring private capital in a way that builds investor confidence while keeping the business scalable.

For those who have scaled beyond a few flips per year:

• How do you structure private money deals to make them attractive while still protecting your margins? Are you offering a fixed return, equity split, or a hybrid structure?
• When working with multiple investors on different projects at the same time, how do you handle collateral? Are loans secured against specific properties, or do you use a broader approach like a portfolio or personal guarantee?
• What do investors typically look for in a “slam dunk” flip? What kind of margins, timelines, or risk mitigation strategies make a deal appealing to private lenders for a 4-6 month turnaround?
• What legal or financial structures have you found most effective for managing private capital at scale? Are you using promissory notes, JV agreements, or funds?
• What systems, team members, or processes were most critical in making the jump from a few flips per year to a steady pipeline?

Would love to hear insights from those who have been through this stage!

[Stuart Udis]

@Sam Shikiar By your own admission you are struggling with deal flow. Therefore, why are you focused on capital raising? Your focus should be on building a sustainable pipeline of projects. I am concerned you are prioritizing the wrong things. Secondly, you mentioned having sufficient funds to complete two to three projects without loans and fund a few more with hard money loans. There are plenty of banks out there offering 75-80% LTC financing which are more cost effective capital sources than hard money loans. Remember bank debt is generally the cheapest input in the capital stack, so take advantage to the extent you can.  Based on what you shared you have sufficinet capital on hands to undertake at least 5-6 projects at a time with well thought out financing + have reserves/capital to help advance the construction without relying solely on the bank draws. 

Until you have more than 5-6 projects running at any given time, I will leave you with two action items: (1) focus more of your time and energy on sourcing quality leads on acquisitions; (2) learn how to responsibly use leverage given your cash on hand.