All Forum Posts by: Jim Stoffey

@Jay Hinrichs - that's exactly right.  I understand their side of it, but to your point exactly, it's a great way to build experience.  After speaking with Mark, I have confidence in DLP.  I can't find anyone with a negative opinion of the company.  I think we will stick to this route.  Thank you for your response!

@Mark Redmann The CEO, Don Wenner, has a pretty cool story.  He seems like a very intelligent guy and has created a ton of success with this model.  Let me know how it goes up there...I'm curious to hear.  I'll reach out to you via email.

@Jeff S., thank you for the constructive response.  It's challenging because I think it's too good to be true for both of us where I'm at right now, but later in my career it would be too good to be true for me, and weigh heavily in their favor for your reasons.  You're correct, I am essentially paying them $795 for the privilege of finding THEM a deal. However, I look at it like this; my risk is limited to $795 for my first rehab project. And to your question of who owns the money, DLP thinks like you: they lend 100% so they control 100% of the asset until closing. That is how the JV is arranged.

@Account Closed "Bring me a homerun and I will share it with you" that is a great way to put it! I guess, I don't mind sharing at all. In fact, I'd do it for nothing to get the first deal under my belt. But I'm sure, like you said, we could find someone on BP or one of our local REIA's who be on board. Again though, I like that they have so many resources, checks, and balances at their disposal to get us through the deal smoothly. Perhaps we could use these guys as a last resort.

@Dev Horn Thank you for the great response!  Your thoughts are similar to mine.  Like Nicolas said, I feel like it's always a win-win for ONE side, but I have never seen it set up exactly like this.  Don Wenner is the guy who started this company and he has become immensely successful with this strategy.  It's called DLP "Direct Lending Partner" in Bethlehem, PA.  I am trying to get a few referrals.

@Mark Redmann We didn't really get a chance to talk last night, I know.  But no worries, I'll be at the next one and we can catch up.  You guys did a great job, it was awesome.  I wish it would've gone on until 10pm.

@Account Closed I appreciate the response.  I know where you're coming from, but like I said to Nicolas, I like that they hold my hand through the process since it's my first deal, and I would have no (or very little) financial responsibility.

Thanks again everyone for your interest.  We'll update this post as we advance.

Hi all,

I'm a long-time lurker/listener, but this is my first post in the forums.  After attending an awesome BP meetup in Philadelphia (hosted by @Troy S.) some red flags have come up regarding the structure we're looking to use to fund our first flip.

My partner, @Phil Sabella, and I have connected with a financier/partner who does JV's. It's set up as follows ('We' being Phil and I, 'They' being the financing company):

• We find the deal and we use our finances to find the deal.
  • We can find the deal however we'd like. MLS, direct mail, through a wholesaler, etc.
  • The property can be located in PA or NJ, they do not care.
• We have to send them a detailed comp report
• We have to have our GC's come out for bids (on our dollar)
• We have to have our inspector come out (on our dollar)
• We have to get the property under contract with a 10 day inspection period before we can show it to them or have their inspector come out
• The contract has to be assignable
• $50,000 is the profit they ask us to shoot for
• 6-8 week rehab time, no structural issues

Once we find a property and get it under contract, we must immediately pay $795 for their inspector to come out, send them our comp report and our GC estimates. They will verify what we send, and if they agree, we assign the contract to their company & we enter a JV agreement with them agreeing to split the profit 60% us, 40% them or 50/50 depending on the deal. They'll then put up 100% of costs including selling/staging and we will manage the entire project from start to finish.

At first I thought it sounded too good to be true.  But I started to come around when I realized this is a great way for their company to get deals done without lifting a finger, and we pay for their inspection.  Limited risk for them, limited risk for us.  They also rehab houses on their own, so if we screw up they come in and take the deal over and complete the project themselves.  If the deal is successful, they also offer hard money and encourage that for the next project.  I think this is a great way to set up a business, actually, and am impressed with the way they do things, if we're not being baited.

So, has anyone had success using a structure like this?  Is there anything we need to look out for?  My *biggest* concern is the $795 'commitment fee'.  There is nothing stopping them from saying "no" to five properties, pocketing the fees, end of story.  

I'd love to hear horror stories as well as success stories with this strategy.  Any advice would be fantastic!

Awesome, thanks guys! See you there. @Mark Redmann@Troy Sheets@Phil Sabella

Hi @Mark Redmann, Phil and I are both looking to attend July's BP meetup in Philly.  Tuesday, July 7th, correct? At iMunch cafe? I found the post for June's but didn't see one for July.

Thanks for responding to Phil's post, hopefully we'll see you at the meetup!