All Forum Posts by: Jim Lin

Hey BP,

I have a rehab in the pipe line where I'm partnering with my dad.  I will do all the leg work, manage the construction, oversee the sale and he will be a silent partner providing 100% of the funding.  Does anyone know a good attorney in The Woodlands, TX that could help me with the paperwork.

This is my first time doing a deal with a partner, so I wanted proper legal advise on this one.  Alternatively, if people have suggestions on drafting the agreement myself, I would be open to suggestions as well.

I currently have a sole proprietor LLC which I run my 3 rentals out of. That said, I don't think having my dad buy into that entity would be fair. I was thinking more along the lines of a JV for the current project only. The split is structured where he gets 8% PIK + 50/50 split of the upside.

Thanks,

Jim

@Scott Shafer I agree with Chris that it's best to have some kind of result to show.

It's also important to become the expert/mentor on REI in the circles you want investing with you. Be excited about the deal/opportunity and educate people on REI. They tend to be more receptive than if you were making a sales pitch.

I was surprised when I recently got offers from 2 coworkers to invest in my next acquisition.  It started over a lunch conversation about 401k's and retirement.  When I told them I invest in buy and hold properties, one of them lit up.  He mentioned that he was interested in REI but didn't know how to get started.  The rest of the conversation was me giving an intro to REI and answering questions.  By the end of lunch I had 2 potential investors.

As far as returns, for a rehab, you will want to give them a timeline of when they can expect their money back.  Rates are usually 8-12%.

@Lee Arnold Welcome to BP!  It would be beneficial to post a profile pic when you get a chance.

Welcome to BP!  Sorry to hear about your situation.  The silver lining is that you have more time to network and find deals.  http://www.biggerpockets.com/renewsblog/2010/06/10...

Good luck!

@craig Koehne,

In the oil and gas industry, the richest people I've met have been private owners of oil companies.  Every one of them has made a comment along the lines of they "always invest someone else's money."  The same holds true in real estate.  While it's not always possible to rely solely on loans/investors/partners, the fact remains that leverage allows you to scale up much faster than you could with your own cash.

As for networking with wholesalers, investors, or private money lenders, you're off to a great start by being on here. Find some REI Associations either on BP or Meetup.com. there are many in Houston. I'm personally try to figure out which ones are worthwhile myself and will definitely share if I find a good group. There have been a few, which I won't name, that are trying to sell courses.

I have no experience with  doing the legwork of finding off market properties myself, but there is a lot of good info in the podcasts. 71 and 74 come to mind.  I still rely on Realtors, other investors, and wholesalers for my leads.  

@Joshua Marriott Welcome to BP

@Account Closed ,

I am just getting started in rehabbing and flipping myself and have recently made some good contacts that are doing exactly what you plan to do, flip houses in the $50k - 150k range.  So I will regurgitate the advice that was given me.  The price range you are looking at is definitely the bottom of the barrel to lower end in the Houston market.  

1) The property is in a decent market but needs significant work.  You will be competing against many other savvy flippers to purchase the property and will need significant cash on hand to complete the rehab.

2) The property is in a low cost area.  You can easily put in more on rehab than the property will ever be worth.  This is actually where my friend focuses his efforts, but knowing the neighborhood is very important.   Make sure you will be able to move the property.  Low cost typically means lower margins, so the speed of the rehab becomes even more critical.

3) In either case, deals are hard to find. MLS listings will get a lot of competition. You will need a flexible schedule to be able to look at properties and make your offer within hours of the listing. It is useful to have a generic offer to purchase on hand that can be filled out and submitted right away. Deals in this price range are mostly purchased in cash, so you will need the capital squared away.

4) Learn how to find deals outside of MLS.

@Charles Nguyen

Is this meetup open to anyone? I'm an investor and recently moved to Houston. Would like to meet some people in the local REI community.

@Huy N.

I'm currently working for Allied Oil & Gas, a mid size service company.

I saw you talking about a meetup on July 10th. Is that open to anyone?

@Chad Althaus Welcome to BP. I think it's awesome that you are looking to get an early start. Check out the Beginner's Guide which can answer a lot of your questions.

With respect to your question about the Dallas market in another post, I think there are opportunities there. I just purchased in 2 multifamily properties there last year. The upside is that Dallas, along with all the metro areas in TX consistently rank in the top 10 fastest growing cities in the US. This means there is definite demand for housing. Unfortunately the growth has outpaced the supply in recent years, driving up real estate prices.

The key is finding the right deals. Learn the analysis methods mentioned in the guide and numerous posts on this site. You're an ME so remember "measure twice, cut once." Use Realtors and appraisers to get a few market analyses, check with County Tax Office records for taxes (don't estimate), get quotes on repairs and reno. Run your numbers, then run them again conservatively. If you're comfortable with the result, pull the trigger.

Good luck!