All Forum Posts by: Daniel Hansen

 Thank you for the info, greatly appreciated!!

 Thanks for the feedback, I understand it could've been cleaner to just wholesale it to her, but then there's no reason for her to keep me on as the contractor performing the work, she can just find a GC willing to do it all and then keep more of the profit on the back end, right? Sure I make a percentage on the wholesale, but it wouldn't be anywhere close to what I can make being involved from start to finish. Providing the deal and proposing the partnership as 50/50 keeps me in the game by running the remodel therefore allowing me to see a split upon completion, right? 

 Thank you for the input!

 I get what you're saying, but with this specific seller's scenario, an all cash contingency free as-is off market buyer is all she was willing to sell to. So in your example, I get the money on my own but it isn't all cash. This specific deal only works if I find an all cash buyer, which I did, and I personally do the flip minus subs. 

Thank you for the response Greg! Profit is expected to be right around $100k, and neither of us as the agents are getting a commission on the sale of the property. So it is essentially a one of one deal with this partner.  

And yes, she and I are getting together soon to go over all of this and put into writing. It’s my first “finder a fee” type of scenario so I appreciate the insight on typical workings! 

So I have done 3 fix and flip rehabs alongside my managing broker, on all 3 she has come across the property through her network and was able to purchase all cash below market value due to a variety of reasons on the sellers side. On all 3 properties, I have manages the flip because of my background in residential construction, including performing all carpentry work myself while subbing out other facets (electrical, plumbing, etc...). HOWEVER, I recently came across a home run off market deal via talking to a new neighbor of mine looking to sell her deceased parents' family home here in Denver. This neighbor was looking for an all cash, no contingency buyer willing to purchase the property "as is", and if anybody knows the Denver area right now, she would be able to find multiple interested parties. It just so happens that I recently moved in down the street and while introducing myself, got to talking about this subject property. Fast forward 3 months and we're under contract as of today to purchase the property!! My managing broker and I are floored, as the numbers are telling us this could be the most lucrative flip yet.

My question for you all is this: On the previous 3, because she has been the one to procure the deal, purchase the deal, and then resell the remodeled home, I have been paid on an hourly basis to manage/work on the properties. For this next one, we've loosely talked about a split at the end of the project but I am trying to hone in on an appropriate percentage for that split. Keep a few things in mind -

1.) My managing broker funds the purchase/remodel 100% - she acts as the bank and has complete financial investment into it.

2.) I found the deal, procured the sale, represented the seller (I have my RE license as well) and have 100% brought this deal to life (aside from the fiscal purchase, obviously).

3.) I will be running the entire remodel, including pulling permits through my father's GC company, performing ALL carpentry work myself, and will be hiring subs on an as needed basis.

4.) My managing broker and my girlfriend will be doing the entire design/layout themselves, keeping this in house.

SUMMERY: Managing broker is the bank, I found the deal and will be run the entire remodel myself, managing broker will list/resell property at the end.

So what do you all think would be a fair split/breakdown of profits? Should I continue to charge my going hourly rate for carpentry (which I have always done with her) and then take a smaller percentage of profits on the back end? Should I "work for free" in the sense that I'm not paid hourly because the splits on the back end are higher? Just looking to get some opinions regarding all of this, anything any of you fine folks can provide would be greatly appreciated! Thank you in advance!

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $580,000

Cash invested: $60,000

Sale price: $781,102

My managing broker purchased this property from an owner who was upside down in the house, I remodeled the entire main floor including building a brand new kitchen, moved the laundry room from an odd location behind the kitchen to its own room in the basement, hired contractors to fixed stucco work, paint the entire interior and sand and refinish all the hardwood floors. I managed the project and had it completed and back on the market in 6 months.

What made you interested in investing in this type of deal?

I have worked as a contractor for many years, switching over to the agent side of real estate opened my eyes to the potential in run-down properties.

How did you find this deal and how did you negotiate it?

This property is located in Roxborough Park, a small community where my office is located. My managing broker was contacted by the owner because he was upside down in the property and wanted out. She purchased the property from him and hired me to manage the flip.

How did you finance this deal?

Private Money

How did you add value to the deal?

Complete main floor remodel, moving a laundry room from a very odd location to its own room, opened the floor plan and purchased all new appliances for the brand new kitchen. Re-tiled two bathrooms and sanded-refinished all hardwood floors.

What was the outcome?

Outcome was a sale price $200,000 more than purchase price in a 6 month time period.