All Forum Posts by: John Keane

@Stuart Udis

All great comments, seems like putting skin in the game will be a reassuring factor for any potential investors. This is a great idea that I think I will incorporate.

Your point about a contingency line item is smart, I will need to talk to my lender about that possibility. 

And to be honest, I have only considered a hard money loan because that is what my few mentors primarily use to fund their flipping businesses. Always open to new ideas, but defaulted to hard money because it is what I already know.

Very helpful Stuart, thanks for the info. 

@Jay Hinrichs

Got it, I will definitely re-evaluate my profit split structure after what I have learned here. 

The fresh perspective from someone outside of my network is crucial, that way my expectations can be closer to reality if I decide to reach out to new contacts for this opportunity. 

I think one important note that I omitted from my original post was some background info. I have been working with investors in my area and partnering on deals for the last 4ish years. When it comes to experience I have facilitated my fair share of successful projects, however the point still remains that I did not complete those deals completely independently. In the pitch I include just a couple of my projects from the last year as a reference to my experience. 

Thanks again Jay for weighing in, appreciate your insight.

Hey @Trevor Finn

Absolutely, I have the structure mapped out and organized to review with investors. 

I think the main thing I am learning here is to adjust the profit share between myself and my private money partners. This is a hard pill to swallow, but one that makes sense due to the higher risk of this being my "first deal". 

Thanks for the insight on where to network with potential investors, I will definitely look into that. 

@Aron Sperber

Definitely! Let me figure out how to connect with you first (still super new with BiggerPockets).

I would imagine there is a way for us to direct message? Or we can just exchange contact info.

@Jay Hinrichs

Hey jay, appreciate your insight. I see what you mean about offering a higher return to a potential investor, especially if they are not familiar with my character/experience in the industry. 

Don't you think 75/25 to the gap funds investor is a bit extreme? Or were you using that more for an example? I think you bring up a good point of considering offering higher returns to investors if I have to begin to search outside of my network.

But my original question from the post still remains, where would you recommend I search for people interested in an opportunity like this?

I would say I have 5 people in my network that would be interested/capable of investing at this scale, and I am starting by reaching out to those individuals.  However, in the off chance that I am not able to cover my gap funds (est. $200-$300K) from that small circle, how would you recommend I start branching out? Obviously I can start pitching every person I come across, but my goal with this post is to be as efficient and particular as possible with who I contact.

Context: This is for a single family flip in the San Diego market. I have not selected a specific property yet, but want to at least identify my potential investors. I have a hard money lender established to cover 80% of the purchase and 100% of the rehab, so my capital partners would be covering:

• 20% of the purchase price
• Range of $30,000-$50,000 cost of capital
• 25% of the renovation budget (to kickstart the project while waiting for reimbursements)
• $25,000 contingency pad

Any tips would be great, and if you happen to be interested yourself I can send you more details. The structure would be a 75/25 profit split with projected returns of 10-15% on your money in 4-5 months.

Asking price is in the ballpark of $1.02M - Allowing interested buyers to have access to the property tomorrow morning. 

DM me or reply if interested, I can send you the full details.