All Forum Posts by: Dan Kim

I have a fix and flip deal in Columbia that looks great and I am looking for an investing partner. If there is a lender that can act as a private lender, I can partner in two ways:

1) 50/50 profit split where I will bring the deal ("sweat" equity) and investing partner brings 100% of the funds. As described in an LOI, that investing partner would recover 100% of their investment at closing, and we split the profits 50/50, or

2) I will apply for a HML and that investing partner cover the 20% down payment + holding/closing costs, and I will provide a 12% annualized return on their investment.

If this looks of interest to you, please let me know! I have the analysis breakdown of the property in question and can discuss further for those seriously interested.

Basic info for now:

Purchase price: $450,000

Reno: $80,000

ARV: $655,000

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Columbia, Maryland

Quote from @Brandon Wagner:

Hey Dan, happy to chat with you in more detail. I know some Private money folks. some look for just debt, some will do equity. Usually they want to see some experience though if they go down that route. (It give a better chance that there will be some profit that they get to take some of)

Hi Brandon, appreciate the response. I am a beginner in the real estate world, looking to do my first fix and flip. I am seeking investors/partners who have the capital to invest in me where it will be a win-win situation. I'd love to chat more about the specifics when you are free.

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@Crystal Smith Thank you for reaching out. I am in the DMV area (DC, Maryland, Northern Virginia)

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Hi. I'm looking to find private lenders in the area and was trying to see what may be the best way to go about doing that? The "sweat equity" will come from me finding fix and flip deals and working with a team I've assembled (agents, attorney, contractors, insurance agents, etc.) to closing deals. Thank you in advance.

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Columbia, Maryland

Thanks @Adam Schneider

In terms of the sweat equity, I can find the deals and have put together a team of agents, contractors, RE attorney, that are ready for me to place an offer on a good deal. I'll figure out how to rephrase my post! Thanks again

1 Vote

Hello BP Community,

I've learned over time and through BP that working with a partner may be the best way to begin my portfolio. The reality for me is that I have little capital to start and it hasn't helped watching a million gurus on social media talk about the "ease" of utilizing OPMs. I keep asking myself, "who wants to work with someone with zero experience and no capital?" I'm willing to put in the "sweaty equity" and am very eager, but are partnerships in these situations possible beyond my own network?

I appreciate any advice, suggestions, real talk. Thank you!

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Quote from @Chris Seveney:

Quote from @Dan Kim:

Quote from @Chris Seveney:

Quote from @Dan Kim:

Hello BP community,

So I’ve lined up a great agent, contractor, and hard money lender. I’m having trouble finding private money lending specifically for that 20% down on the hard money loan.
If my goal is OPM, just wondering if anyone has recommendations on how they found their private lenders. Thanks!

IT will be nearly impossible to find a private lender to line up the down payment. The first lender will be against it and second lenders right now are hard to come by. We have done a few but its been 15% + 5 points with a personal guarantee and attaching it to other assets they own. If they have no other properties then its a definite no go as they have zero skin in the game and zero incentive if it goes bad.

One thing to look for is a business partner in the deal but you will have to give up 75% of profits + ...

@Chris Seveney Hmm, there are two HML who accept private money lending on the down payment. I just need to fill out a form to validate the funding.

lets see how real they are.... don't say we did not warn you

@Chris Seveney no this is good info for me. It makes me second guess and I’ll do my due diligence to dig deeper with these lenders.

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Quote from @Andrew Postell:

@Dan Kim a couple of things here:

1. HML w/Downpayment requirements - usually we don't work with these types of Hard Money Lenders (HMLs). I mean, you can work with whomever you want to of course...but if I had to have 20% down on every property I purchased...I wouldn't have any properties. The whole concept of these "alternative" strategies is to AVOID the 20% downpayment. 20% down is a traditional loan....or a DSCR loan. I can't do that, and that's why we buy off market, and why we use hard money. At least, that's why we use the HML that we use.

2. The deal itself - The math to this stuff isn't hard...but it is important to know. For example, most of what we base our decisions on is 75% of the ARV. We use that math because that's what the HML will lend us. So, if I found a property where I can BUY and REHAB at 75% of ARV...then my downpayment is $0! That's what I want. Is it realistic to be able to find deals with $0? Probably not. But if I do get lucky, I still want that chance. What if I found a great property where I can BUY and REHAB at 80% of ARV....that's cool to me. Now, I am coming out of pocket 5%. (oh, and don't forget closing costs). I'm ok with that too. But if I'm not ok...then I make my offer 5% less. Now I can adjust my offer to fit the math. That might mean that I don't get the deal. It's not my fault they are asking too much. I can only do what I can do. Alternatively though...if I find a property where I can BUY and REHAB at 100% of the ARV...well, that's not a deal. I need to have that equity spread in the property. I'm risking a lot when I do rehab. I need the equity to hedge my bet. I also need it because I can just go BUY a property off the MLS at 100% of the value...that will need no rehab - and no risk. But now I'm back to needing 20% down again. Which I can't do. I need the deal itself to be mathematically good.

I hope this makes sense how I am describing it.

@Andrew Postell So when you’re finding properties off market, you are dealing with wholesalers? Or are doing the door to door knocks yourself?

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Quote from @Chris Seveney:

Quote from @Dan Kim:

Hello BP community,

One thing to look for is a business partner in the deal but you will have to give up 75% of profits + ...

@Chris Seveney Hmm, there are two HML who accept private money lending on the down payment. I just need to fill out a form to validate the funding.

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Quote from @Charles Carillo:

@Dan Kim

This will be more difficult since the private lender will have a 2nd position on the property. Obtaining this from friends and family might be easier unless you have a long track record. Do you have funds available for the renovation, holding costs, etc.? Even if the lender is covering the renovation costs, they usually work off of a draw schedule where you perform the work, and then you are reimbursed.

@Charles Carillo So far that has been my approach for private lending, through family and friends. I offer a 10% annualized interest for their investment. The HML I've connected with do cover up to 80% of the renovations with a draw system. The private money is specifically for the 20%, the holding costs, and interest payments.

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All Forum Posts by: Dan Kim

Dan Kim has started 18 posts and replied 49 times.

Post: Private money partner for a fix and flip

Post: Looking for private money lending partnership

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Post: Finding private money

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