How much are you profiting flipping homes in Atlanta?

[Harry Williams]

I am purchasing a home and financing the rehab with a partnered developer who manages the entire project. Profits are to be split 50/50. 

$350,000 purchase price

$60,000 rehab price

$520,0000 ARV

$83,600 total profit before split & taxes

[Harry Williams]

Originally posted by @Joseph M.:

Hi @Harry Williams , just curious about the structure of the deal. You are putting up all the funds for the purchase of the property and the rehab and your partner will be doing all the work, and then splitting the profits? 

 Yes, that is correct. There is a development agreement between the developer and I with the fine details. A real estate attorney put it together. I purchase and own the house, and reimburse rehab costs. Upon sale, we split profits 50/50 and I am guaranteed a 20% per annum return. 

For example: if my return was only $25,000 or 6.05% in the four-month holding period, that is only 18.16% per annum. Because the contract secures a guaranteed 20% per annum return for me, and I pay the developer after I am paid, then $5,551 would be deducted from their pay bringing me to $30,550 profit or 20% per annum return.