Find my own deal or partner with a seasoned investor?

[Brian Garrett]

I have spent the past 6 months or so educating myself on REI as much as possible primarily here on BP by listening to countless podcasts, posting tons on the forums, analyzing hypothetical deals, networking with other investors, realtors, wholesalers, lenders, contractors and everybody in between. I also have a close friend who did two flips during that time frame so I was able to pick his brain and watch that process through from start to finish. Now I'm ready to take action and start looking for my own first deal.

Here's my plan and what I'm ultimately looking to accomplish:

I was fortunate and disciplined enough to build up some savings through my previous business endeavors to have as working capital knowing one day I would go eventually go into REI.  That time is now.

My primary plan is to use the BRRRR strategy to ultimately build a portfolio of SFH's and MFR's. I feel this strategy will work best for me since I can continue to recycle my initial working capital over and over again which will allow me to scale faster.

I love the whole idea of rehabbing to force appreciation so that is another reason why I feel that strategy is best for me.

I also plan to do some flips to generate more working capital that can be used to buy more cash flowing rentals.

The end goal is to build a large REI portfolio which I'm now prepared to work full-time at to ensure that I succeed.

At 34 years old I'm also still young enough and naive enough to believe that I can do it.  If there's a will, there's a way!

With all of that being said:

Would you suggest that I start looking for my own deals or that I look to partner with a local seasoned investor on a deal or two first?  The value that I would provide to them would be via my capital, my time and my sweat equity that I'm willing to invest into the deal.  This would be in exchange for their experience, knowledge, resources, mentorship and project management.

Furthermore, keeping my goals in mind, if you were me would you use the initial capital to start off slow and leverage it among several different properties or would you be looking for a larger MFR right from the start?

I'm looking forwards to hearing your feedback.  I'm either ready to start hunting for deals or start hunting for partners.

One way or the other I'm done sitting on the sidelines!  Thank you in advance for your input and advice.

[Shiloh Lundahl]

@Brian Garrett the reason that I said that YOU probably wouldn’t make much money on the deal is because if you partner with someone who is really good at real estate then they don’t need YOUR money. They will probably already have many streams of money to work with themselves that they pay between 5% and 16% on such as hard money lenders, private money lenders, business lines of credit, etc. so if they are really professionals they probably don’t need your money. The experience that you get is worth more than the money. 

There are many new investors that want to partner up with an experienced investor, throw a little bit of money at a deal (10k - 100k), and then they want to make half of the profits. Putting money into a deal is the easiest part of it. Any one with some money can do it. Finding the deal, recognizing that it is a good deal, building systems to make everything happen, and knowing what to do when things go wrong (which they usually do), is the art of investing that is developed over time with experience. That is what you really profit from when you partner with someone on a deal.  

So the question is, if the experienced investor already has his or her streams of money to use, then what do you bring to the partnership? How do you make it worth their time to sit down with you and show you step by step how to invest in real estate wisely? The only reason I could see an experienced, busy investor doing that is because they like you and are willing to take someone under their wing. But if you approach them asking to split the profit 50/50 that may come across as naïve, and unattractive for them.

With all this being said, you may decide to just do it all yourself, however, for every 1st deal success story, there are probably 5-10 stories of people who have lost money on a first deal. So in my opinion, partnering up with an experienced investor is worth more than the money you get. It is better to get 10% on your money in a deal than to lose 5k on the deal (or 100k as some people do as shared in the recent podcast by 

@JD Martin)