All Forum Posts by: Alex R.

Does Flip has an advantage over buying muliti family properties as the first real estate project ?

Something that is doable considering limited experience of such investor; offering a reasonable reward and manageable risk.
For example I know Auctions have potentials for huge equity right at the time of purchase but there are complexities to them such as liens or deferred taxes.
Multi-family units seem to be lucrative but then they have their own downsides.
Flip needs experience in managing time, contractors …
Which path is the ideal path to take as for the first deal?

George

in this scenario what is the justification of me taking 50% of profit and not less.

I mean I like to take a bigger chunk but would that be fair ?

Jon
Thank you for your detailed answer.
This was really helpful

Hello Nate and thank you for your response.

Doing all the work in this case means I will be the person who makes this deal happen. Who found the property, will negotiate the price, take care of all paperwork, managing the renovations on an ongoing basis ,…

Basically the two other partners are very wealthy people who don’t want any headache at all. They just want to write a check as for the down payment and they receive a monthly check for the cash flow and also a big one when and if property is sold.

So basically I will be the person who will be running the show from the get go on. But we will hire property management however that management will not be in contact with those two investors per their request.

They just want to receive a report and also a check every month. I am not putting any money down.

It’s a 25 unit apartment with a very high occupancy rate.

What is the norm for ownership and sharing the cash flow when three partners purchase an income property?

Let’s say one does all the work, the two others come up with down payment.

Is everything going to be divided by three or 50 – 25- 25 or how is this going to work? In a way that is fair and reasonable

Thank you very much for the quick reply Jon.

Let’s say I want to go with option b) self manage and work for free and live in one unit (so as for calculations, I will be a paying tenant too).

Cash flow = (rent * 0.64) - P&I payment

Here is the property I am considering to buy .

East Bakersfield - Quad
Purchase price: 160 k
Annual Gross Income $28440

Monthly Rent: $2370
Down payment: 3.5 % = $6000
Interest rate: 3.6 %
P&I : $702

Cash flow = 2370 x 0.64 - 702 = $ 815

Hello Everyone

For buying 4 units and under (quads – triplex and duplex), I need a formula to show me whether a deal is a good deal or not

there is no attitude but being fair and treat everyone the same way they treat you. Fair and Just

completely true.