Newbie Looking for a Family Loan Business Plan

[Adam Goldberg]

Hi All,

My name is Adam, I wanted to introduce myself and briefly explain what brought me here, and the direction I'm looking to go.  I went to school for Architecture have been in corporate space planning and facilities project management for the past 8 years. My wife and I got married earlier last year and are expecting our first child in a few months. We currently live on the West Coast, but are originally from New England and considering moving back to be closer to family.

I'm sure I am like many people on here that have been forced into getting their finances in check and think more about the future due to big life events (i.e. married and a new baby within a year!). While our savings accounts are slim, we fortunately have excellent credit and will have no debt as soon as my wife's student loans are paid off right before the baby is born. 

With all this in mind (and the fact that I've always loved the flipping shows on HGTV), I recently began to research Real Estate investment (REI for Dummies, BP Podcasts) and everything is starting to make sense, because before when I didn't have the math right in front of me I was very skeptical of the numbers. I believe my professional skills are very transferable to this business, but also understand that there is much to be learned along the way. I have a low cost area in mind that I think has a lot of potential and I'm really itching to get started, but want to play it safe as well.

The current plan is to stay on the path, save up enough to purchase our first home with conventional financing, with the opportunity to do some renovations, increase value and use that as a learning opportunity to investing in additional properties. This plan is assuming my wife and I both have full-time jobs and do an estimated 1-2 buy/hold deals a year. That being said, I'm close to being done with the corporate 9-5 job and would really love to jump into it so I've been debating asking a wealthy uncle to borrow a substantial amount of money in order to get started. This brings me to my first question/scenario I'd like to post here...

My uncle is an incredibly successful businessman, so I would want to be very prepared before I even brought this up in conversation (and I can't do this without my wife being onboard too, so I want to make her feel safe as well). How would you recommend setting up a business plan for a personal loan under the following hypothetical conditions for property in the area?

1. All Single Family Residential, 3bd/2ba

2. Cost - $100k / Rehab - $25k / ARV - $150k

3. $1500 monthly rent

4. First Rehab to Lease takes 6 months, Second and beyond take 3 months each.

5. No interest

6. Payback to begin after 12 months

7. Yearly Living Expenses - $50k

The idea is that I would start off very conservative to learn the ropes and try to get his money back to him asap so that I can in turn ask for more cash by way of an investment instead. If I were to ask for $100k, how would you suggest putting this money to work in order to pay my uncle back asap? The process of writing this post has taken quite a while, because I'm not 100% sure I'm even asking the right questions, so please feel free to modify the hypotheticals and let me know if any more info is needed.  

I look forward to hearing the feedback, thoughts and ideas and being part of this community!

Cheers,

Adam