Investing in/with a House Flipper - How to Assess

[Brandon Shewbridge]

I am interested in investing in real estate on the buy and hold side for longer term wealth building and cash flow purposes.  That's what brought me here initially.  I've been kicking around the forums a bit and reading a fair amount on buy & hold strategy and landlording to get up to speed before I do anything.  I'm working on finishing my business plan/strategy there and hoped to take the initial plunge in early 2017.

I got a call today from a contractor that I used in the past for some renovations asking about me possibly investing with him on some flips.  We see each other on occasion in business circles that we are a part of.  I know that he has been doing this for some time now (at least 6 years since I used his services).  I had a brief conversation with him today and am going to meet him in a few weeks to discuss further.  I thought that this would give me some tome to do some more homework on this front.  He's telling me that he's turning around properties in 4-9 months and that he is providing 8-12% return for his investors (per flip).

I can't speak to the ROI model here because I haven't read enough so I'm hoping that someone else with more experience could chime in on that.

My "flip" experience consists of buying four of my own residences as fixer-uppers, doing the needed repairs/upgrades while living there, and then selling them several years later for a nice profit when I was ready to move on.  If I apply business sense from my day job, 4-9 months seems like a long time for a flip turnaround. My intuition tells me that I would want to get in and out of a property as quickly as possible to reduce the carrying costs (as well as to get the money back for the next opportunity).

I would think that a more detailed analysis on the turnaround time would shed some light on where the problem(s) are.  If I could help him get those fixed, it could shorten the timeline and possibly increase the return.  At the very least, I think that it is worth further conversation, but before I have that conversation, I'd like to hear from the experts.  Thanks.