Deal Advice

[Rob Brewer]

Hello all!

My most recent post was in regards to the FHA "90 day flipping rule" and had I read J Scott's book (which I have since purchased and read) I would have known the answers. But anyway...

Here is my situation that I'm seeking advice about. My first flip is on the market waiting for its new owner. I have most of my $$ wrapped up in this guy so I'm a little nervous about getting another flip until it sells. But, I'm SO anxious to get my next flip going and think I have the next deal lined up.

I have an opportunity that I feel will give my business a little traction.

Purchase Price - $130k
Fixed costs - $25k
Rehab costs - $60k
ARV - $250k

Option 1 - My buddy is buying the property (closing scheduled for 7/31/13)and is okay with doing a JV deal. His only reason for buying this property is to section off 2 of the 4 acres of land for himself. He would purchase the property and pay all carrying costs. I would supply rehab money (which I don't have right now as mentioned above) for a determined profit split.

Option 2 - My buddy buys the property and I would buy it on contract from him. I would pay all carrying costs (he still gets 2 acres). But, I would find another partner to bring the rehab money to the deal for a determined profit split.

Option 3 - I put the property under contract and wholesale to another investor.

My main goal, obviously, is to put as much money in my own bank account as possible to help grow my REI business. I think "option 1" is the best way to do that. The $60k rehab money is my biggest hurdle. I've already tapped my private money person for the first rehab and would feel a bit uncomfortable asking for more money until I have her paid off from the first deal. Do HML offer rehab money only...since they wouldn't be listed on the deed? I've thought about a construction loan...

This is why I think this deal could give me some traction....money would be less of a hurdle on future deals!

What advice can you seasoned investors give me in this scenario?