Million dollar opportunity

[Gabriel Ehrlich]

I have been approached by a family to help build a real estate business with them. They propose a 1 million dollar investment to begin with. If we are profitable the first year they will add another million, and this will continue year after year. They are interested in the Baltimore market which I am familiar with. However, I’ve never really considered my investment strategy with a million dollars (all cash, not borrowed). They are interested in everything ... rentals, flips, new construction, multi-families. They’ve asked me to write a strategy proposal but I’m not sure what the best way to go is. With a million dollars I’m estImatIng we could do between 7-10 houses as flips in a year. For my experienced investors out there... what would you guys do if you were given a million dollars to build a real estate company from the ground up?

[J Scott]

Please don't take this the wrong way, but I see two issues here:

1.  If you don't know what to do what $1M, you probably shouldn't be willing to take $1M from another investor to investor for them;

2.  You don't seem to be asking the right questions.

#1 speaks for itself.

As for #2, the correct question isn't what WE'D do with $1M -- the correct question is to the investor, "What are you looking to achieve with your $1M?"

Are they looking for ordinary income?  Are they looking for cash flow?  Are they looking for tax benefits?  Are they looking to build generational wealth?  Are they looking to build a brand?  Are they looking to help the community?

Without knowing what the investors are looking to achieve, how can you possibly determine the right strategy to help them achieve it?