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Updated about 7 years ago,
Help! Newbie question: locked into contract with guru
So, my husband and I started taking a real estate investing class from a fellow church member, friend etc. She flips, has multi-family rentals etc. She is starting a "business" teaching people how to invest in RE, basically marketing herself as a guru. Before we knew anything about BP, we signed a contract for her to hold our hand, teach us everything about flipping ($25K ) and buy and hold rentals ($7,500). We paid $1K down. She has trained 3 other people in the past who have gone on in RE investing, flipping etc. and some of them are more successful than she is. (If we reneg on the contract, we still pay her $7,500 no matter what as per the contract.)
She found a house for us to flip, we put down $1K. We began to get cold feet and found out about BP and now realized we had other ways to learn this stuff, but are locked into a contract with her. We have several options
1. go thru with the flip, pay her $25K from profits and maybe make $5K or even nothing, but learn everything about flipping and be able to go out and do our own flips. We could even make only $15-20K, pay her and end up having to do another flip to pay her the rest (up to $25K)
2. go thru with the purchase, sell the home to her and her partner with no loss for us and then pay her $5K to basically shadow her as she does everything with the deal to flip it. No risk, no profit on the deal and we learn everything from soup to nuts about flipping, but we pay her $5K for the education.
The numbers on the deal are "okay" (now that we have used BP's calculators after the fact) We could potentially make a total of $35K ($25K for her and $10K for us) or make $20K ($20K for her, having to do a 2nd deal to pay her the rest) and nothing for us.
Worse case scenario, we are out $5K for our "education".
Any advice?