Evaluating deals with investor

[Johnathan Cummings]

Hello all, I’m fairly new to real estate investing, but I’m looking at buying some properties with a partner. I currently have a partner who can invest, but am having difficulty finding deals. The way I’m structuring our agreement is that he will get an 8% preferred return paid quarterly. Once the preferred return and expenses (including reserves) are paid I would get the remainder what. I’m finding is that most if not all of the deals end up with me owing money once all is said and done. Is something wrong with my structure, am I being to conservative, or is it that I’m just not finding a good enough deal at this point.

[Paul Moore]

Hi @Johnathan Cummings.  That is a tough problem to have but I want to commend you for your conservative approach. A lot of people in your shoes are overly optimistic and get burned. I have certainly done that before.

This is really just a very challenging time to find deals that make sense. Especially because you’re new. The pros are scooping up most of the best deals in making it very tough for everyone else.

I recommend you find the most experienced realtor in your area (who does investment deals) and take them to lunch. Lay out your problem and see if they have any insights. Then I would go to your local real estate meetup (REIA) and see if you can find someone to partner with you or mentor you.

Honestly it sounds like you’ve struck a very favorable deal with your investment partner so I hope you can find some thing that makes sense. Best of luck!