Long Distance Rehab & Flip

[Clifford Adikuono]

Hi. I plan to meet a general contractor (GC) for a few days in Georgia. The GC, recommended to me by a trustworthy source, does rehabs and flips of single family residences (SFRs) on a regular basis. He's made some handsome profits off of these rehabs and flips. He'd like to meet me so he feels comfortable doing business with me and I'd like to meet him so he can show me what he does with the rehabs and flips and how he does them. I plan to buy a fixer-upper SFR with a conventional mortgage and a 20% down payment (DP). An FHA loan does not seem like an option as this SFR would be pretty run-down. I also plan to open up a line of credit (LOC) so the GC can draw money from it in order to pay for his rehab crew and materials and I can see how the LOC is being used for transparency and accountability. Then, he plans to find the SFR, provide the rehab crew, manage the rehab, and sell the SFR. Once the SFR is sold, then the sales proceeds would be used to pay off the closing costs, the selling costs, the mortgage, the DP, the outstanding balance of the LOC and all other costs. Then the remaining sales proceeds would be split 50/50 between me and him.

So if someone could please help answer some of my questions, I'd really appreciate your input. So thank you in advance. 

1. In the few days that I have with him, what questions should I ask him?

2. When he shows me his current rehab project, what should I watch for and what should I note down? 

3. How could I prove myself to be the right business partner for him?

4. If we decide to do business together, how should we formalize the partnership? 

5. Do you have any other tips/suggestions?

I myself am new to real estate investing so this would be my first real estate investing experience. I originally wanted a GC who could help rehab and rent an SFR from afar. However, he recommended that I do a rehab and flip since the area he specializes in is best for a rehab and flip rather than a rehab and rent. So I decided to go forward with a rehab and flip because I thought this would be an awesome opportunity to learn how to rehab from afar, make a profit in the process and use that profit for more real estate investing.

I'm 80% done with reading David Greene's Long Distance Real Estate Investing. I've read that book on and off. And I started reading J Scott's The Book on Flipping Houses. Thanks again for your input.