All Forum Posts by: John W.

@Brent Coombs good memory, no not interested in HML at this time. Thanks for the reply, if I lend 70k, and then the property value is lets say 160k after rehab, and he wants to keep as a rental, how does he buy me out?

Hi Guys,
I'm looking to go in on a deal with another local real estate investor. He has a promising deal under contract:
Purchase 30K
Rehab: about 70K
ARV 150-170k
He is a buy and hold investor and intends to keep the property as a rental after rehab. He needs about 70k for the rehab. How could we structure this deal? Interest and points seems like the simplest way, but honestly even 12%/4 points isn't a huge return if it were to take 6months till he could refinance. Maybe we could partner and then he could buy me out after rehab but I'm not sure how the mechanics of that would work. 
Any ideas would be helpful. 

-John

Never pay anyone up front...not your kids, not your mechanic, not your roofer. 

I believe a good wholesaler should be able to close on the property themselves if necessary, so there's basically a guarantee that the deal is going to close on the buyers end. 

Welcome to bigger pockets. Buying my first duplex was one of the best financial choices I've made. 

You aren't saving in interest, you're just basically making 26 half payments (or 13 full payments) which ends up being one extra payment that goes towards the principal a year. 

If you can live there another 10 months then you won't get taxed on the profit when you sell. In the mean time you could do a refinance and buy another property. 

Luxury vinyl plank (LVP) should work. For any big dips you can try and level with sheets of tar paper, or if you're so inclined you can try and level as best you can in areas with cement-all (found at home depot). Every floor I've ever worked on has been uneven/wavy etc, so just do your best. Tile is a bad idea as you don't have the proper subfloor to begin with (wood plank) and it's wavy. There is no forgiveness with tile and to do it properly requires the most amount of work and floor prep of any other flooring choice. LVP is a great choice, easy to install, looks great, waterproof and should last a long time. 

Try and get an idea where they are at with their numbers...like get a sample of a few properties and do the comps and see if the seller is reasonable. Otherwise you can do a lot of work and spend a lot of time with a seller that wants unrealistic prices. 

If you see some great deals, get them under contract, with a contract that allows you to assign, and then find some buyers. 

Not to paint with a broad brush but many contractors are criminals so it shouldn't be a surprise. I say keep an eye on him and let him finish the work.