Real Estate Investing is Not Like Shark Tank

[Aaron K.]

I'm not sure where this idea is coming from, maybe it is the show Shark Tank itself, but I've seen a lot of posts recently where people ask where to find investors to fund them buying a house off of MLS in exchange for a cut of the profits. The investor could just as easily buy the house on their own and make a much better return or they could lend at a fairly high rate compared to a bank, but unless both parties are bringing value to a deal it just isn't going to happen 99%+ of the time.

[Jennifer T.]

Just to add on to that thought, I had my go-to handyman...not a general contractor, but he was very skilled and had his own crew...approach me a few years ago about wanting to partner with a fix 'n flip.  No specific property in mind, more a general idea.

Okay, what does he have to offer?  Skill and labor.  Most certainly.  Money and/or credit to help with financing the loan?  Oh, no, no, no.  All of THAT needed to come from me.  Even the money to pay his laborers and the materials.  Sooooo...why would I want to share potential profits with this guy when I could just hire him out like I normally do?  I wouldn't.

I didn't say it quite like that to him.  But I did tell him that, although I was open to the idea, he absolutely had to have some of his own "skin in the game", ie money.  He never mentioned it again.  It never even got to this point to talk about.  But my other concern would have been...he was good!  So he was busy.  How would he handle the immediate income loss, while he's busy devoting his time to our hypothetical flip.  Right.  I suspect he hadn't thought of that either.