He Gave Me $500K.....To Play!

[William Bratrud]

True story,

About two years ago I was approached by a wealthy friend and given the opportunity to manage and invest $500K of his funds into the real estate market.....whats the catch you ask? no catch, After watching me flip two deals he simply offered me an opportunity to invest his funds in return for 1/2 of the profit on every deal I do. As a bonus he insisted that I also compensate myself for any time spent on the projects at a reasonable rate. 

What did I do? I took him to lunch, we discussed the details and I took him up on the offer. We Hired a lawyer, formed an LLC and immediately I put his money to work! Over the past 22 months I have completed several Southern California fix and flips in my spare time and produced a total of about $250K in profit for an average ROI of 50% annual. In addition to this it has generated about $20K additional annual income for my time spent on the projects. After rehab, I sell the property and the profits are split 50/50.

So what the issue? 

I fell like The money should be working harder. I feel like I have been given a great opportunity and I want to maximize the potential. I feel like I should be able to double the money within two years, triple it within 3 and so on.... Yes I know that these are some decent returns, but I also know the tremendous power that real estate has to create substantial wealth when you invest it properly. 

Given the same opportunity, What would you do? How and where would you invest? 

[Jay Hinrichs]

Originally posted by @Jo-Ann Lapin:

Wow a lot of hard earned work to give so much away . Just my 2 cents .

I have to disagree..  NO risk  infinite returns for the contractor to me it does not get any better.

no stress of going through a mortgage situation and being on the hook to pay a lender back 

cash flow goes out instead of no payments.. 

I get it you can make more but your also taking on huge risks when you borrow money..