All Forum Posts by: Danielle C.

Hello BP community! 

I am in the process of getting off the sidelines and getting into the REI world. We have located a flip and are in the process of figuring out the financing. We are looking at getting a HML and have a partner who is providing down money in exchange for half the net profit. My husband will be the main contractor and there will be some subs for work my husband cannot complete on his own. Can someone give advice or provide a sample contract for the private money and down payment assistance? Will the HML want our partners information as well or just ours? We all have excellent credit but the partner does not want to be involved in the HM piece of the deal.

Thank you!

Hi BP! My husband and I are just starting out in RE investing. Does anyone know where to look for private money or joint venture partners to help finance our first deal? We are trying to figure out the best way to get down payment money for a HML and would love any suggestions. For reference, both of us have an excellent credit score and my husband renovates homes. We are looking at HM because of quick close, less red tape than a mortgage. Thank you!

I'm assuming you also buy liability insurance in addition to property insurance to protect against a potential lawsuit? I am not worried about defaulting a loan, I am more worried about someone coming back at us for something done at the property that we did not have knowledge of or a contractor's craftsmanship... something to that effect. I like to cover my bases when it is possible. 

Everything I have read and learned indicates that it is a wise idea to flip houses under your LLC name as a precaution against lawsuits. Will a HML allow this with a personal guarantee? Does the personal guarantee destroy any protection against a lawsuit?

We currently have no credit card debt or credit cards. There are always tons of offers in our mailbox. Does anyone have a HML who does a higher LTV that they trust?

Originally posted by @Maricela Chavez:

If it was easy everyone would be doing it! That's what I tell myself every time I hit a snag on my deals/rehab/ etc.

If you enjoy sleeping at night I would go nice and slow on this.

The last thing you want to do is lose your *** on a project that you can't wrap up. You have to take so much into consideration.

Contractors, unexpected issues that arise, house sitting on the market. In this business you can literally lose everything.

I would focus on one thing at a time. If you are getting your real estate license why not focus on this and close some deals? In this business you will meet a ton of people that are already doing what you want to do.

Network, ask someone if you can help them on a project so you can see how it works. Unless you have construction experience.

I flipped about 10 house before economy tanked and I'm currently
Working on my second one after getting back into it. It can be pretty scary stuff if you don't have a handle on it. I used all my own cash, and it still can get overwhelming dealing with contractors, etc.

I have talked to a hml, but haven't decided on it yet. I would want to try it to see how it works, but I have my own reserves if necessary.

Good luck.

 My husband is a contractor on the side (his full time job is in the auto collision/insurance industry), but he rehabbed our entire house by himself and does projects for others as well. I'm working on my license purely for our business. I am hoping to take the research stage slow but move quickly on the flip. Still in the information gathering stage, so I definitely appreciate any information. I joined a local investor group and have been using that as a place to network, but still haven't "pulled the trigger" and really looked for a deal. I have my licensure test in mid March, so I have been focusing on studying as well as scouring BP forums for more information. What area are you in?

How does having a real estate license factor into your flips (anything besides access to the MLS and the ability to sell properties)? I see you are a realtor

Thanks. You were trolling earlier, but it's all good. I'm here for advice so any is welcome. The HML obviously requested you as a PG. Do you have a LLC or are you operating as a sole proprietor?

Originally posted by @Chinmay J.:

Originally posted by @Danielle C.:

Originally posted by @Chinmay J.:

Originally posted by @Danielle C.:

If we go through a bank, can we have the home purchased using our LLC name with us as the PG?

Oh ya!!! Good luck with banks loaning to LLC.

 You seem to really enjoy trolling but haven't offered much in the way of good advice lol. 

 I did.. Scroll up and read. My advice is sound. Perhaps not what you want to hear, but still sound.

Chinmay, have you used a HML? What was the deal structure?

Originally posted by @Ryan Murdock:

Originally posted by @Danielle C.:

If we go through a bank, can we have the home purchased using our LLC name with us as the PG?

You won't get the same rates with and terms with an LLC as you would as "Danielle Cushman". You'll likely be looking at commercial and/or portfolio loans with 20-25% down (credit card probably won't suffice) and shorter terms of fixed interest. Probably a slightly higher rate too. You will also still be required to personally guarantee these loans as well.

Thanks for the advice! Seems this LLC doesn't protect us from much, as it seems. We will just have to put some of our own skin in the game, which we are prepared to do. I am almost finished with my real estate license and have another investing course on IRS/taxes next week. We will most likely go with the HML and put our own money into this, since our LLC has no capital until we start working deals