So I am brand spanking new to real estate and investing in general. I recently came into some money via inheritance and I had decided many months before that I want to use it for real estate investing. It's not a ton of money, but I think it's enough to get started.
Anyway, I've been chatting with old friend from high school who happens to be a RE agent. He has also been looking to get into the RE market. He recently started working with a fix and flip investor, we'll call him John and my agent friend Paul.
John started fix and flip investing back before the crash, made a lot of money, then lost most of it in the 07 crash. He's ready to get back into the business, he has the know-how, the connections, the experience. He just needs investors. That's where I come in. He says he's got a lending company willing to lend him purchase and repair costs as hard money up front for deals that meet certain criteria. However he needs $9,000 to buy in to this lending partnership. I can provide that, and if this opportunity is legitimate I really want to get in on this. Paul is really excited, he has been learning from John for over a month now but doesn't have the money to invest financially. I do.
I met with John and Paul, John is very charismatic, highly enthusiastic about real estate, seems to have a brilliant business model. All he needs is some start up capital. I am a new investor, excited about entering this world and learning the ropes, all I need is a partner and mentor.
A match made in heaven or a con-man from helvete?
The question is, does this sound at all legit? Have you ever heard of a lending company you had to buy into? How do I best protect myself and verify John's legitimacy? I already trust Paul, and Paul trusts John. But I have only just met John and I feel what he is offering is too good to be true. But what do I know? I'm a complete newb to all of this!
Before I do anything, of course, my lawyer will be running a background check and going over our contract.
