Found a great deal, but now what?

Found a great deal, but now what?

Real Estate Agent · Phoenix, AZ · Member since 2014 · 130 posts · 53 votes

I found a nice wholesale property. I want to make a move. But now what? Even after books, podcasts, and meetups I still feel like I don't know how to take that first leap. So here's a little background about me: 

I'm part of a fix and flip family that has flipped about 25 properties in the last 7 years. I've been an assistant through all the flips, usually searching for properties, running comps, designing, and purchasing items. So, I have a lot of experience and knowledge with flipping. My dad has always handled the actual home purchasing side of things. 

At this point in time, I want to continue to be part of the family flip team, but I also want to try my own project. So, this is where I am in need of some ideas and guidance. I don't currently have the funds to purchase a property. I figure I will need to use private funding where another investor funds 100% of the home purchase, I do all the rehab, and we split profits 50/50. Does it make more sense for me to go this route starting out as opposed to the hard money route? 

If I do go the private funding route, how do I go about showcasing the property to them? At the moment I plan on using an excel sheet with purchase price, arv, rehab expenses, ownership costs, acquisition costs, projected profit, etc... I see a lot of people say that you should secure the property first and then find someone to fund it, but I assume that's if you're buying from MLS.

Any ideas and recommendations for taking my first leap are much appreciated. 

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  • Investor · Cleveland, OH · Member since 2015 · 6k+ posts · 2k+ votes
    9y

    Why not ask your dad if he'll come at your idea of a JV rather than just being an employee?

    Seems to me you have a ready-made financing infrastructure; but, how's your negotiating skill?...

  • Real Estate Agent · Phoenix, AZ · Member since 2014 · 130 posts · 53 votes
    9y
    Originally posted by @Brent Coombs:

    Why not ask your dad if he'll come at your idea of a JV rather than just being an employee?

    Seems to me you have a ready-made financing infrastructure; but, how's your negotiating skill?...

     It's a good idea, and maybe possible, but the family business is trying to go in the direction of using more hard money and private funding instead of using personal funds. 

  • Investor · Cleveland, OH · Member since 2015 · 6k+ posts · 2k+ votes
    9y

    @Kellen King, maybe they'd let you borrow THEIR funds if you offered them HML Rates?

    (Or are they mysteriously already getting BETTER than HML rates with their funds?)

    If THEY can fund their buys profitably by borrowing at HML rates, why couldn't YOU? Cheers...

  • J ScottPro Member
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    Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
    9y

    Sounds like your dad would make a great mentor, and he already has connections to hard money and private lenders...  Why not ask him to help you out?

    Personally, I don't think it's realistic that for your first property, you'll find a lender willing to lend 100% of the funds for just 50% of the profits.  But, you can try!

  • Real Estate Agent · Phoenix, AZ · Member since 2014 · 130 posts · 53 votes
    9y

    My dad has 3 properties currently on the market right now and is unable to put a down payment on another house. So while splitting a deal with him after he uses hml would be a nice idea, it's not possible at this time. I can see how getting 100% funding and splitting 50/50 may be hard to find when starting out on my own, so I'm looking for ideas and strategies. 

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