All Forum Posts by: Justine Phillipson

I started with owner occupied homes. It made it easier to get started. I own three rentals and my primary home, but now looking to branch out into fix and flips for first-time (and low income) homeowners.

There are a lot of great programs for first-time homeowners.

I would first recommend viewing the BP podcasts to find the investment type that interests you, as well as joining a local (and legit) real estate investing association. I also suggest that you don’t spend a lot of money on courses right now. Identify your goals first.

I wish you all the best.

Hi Justine and rest of BP family,

Thank you for posting this.

I am located in Dallas, Tx and have been thinking about starting real estate investing from quite a while. I dnt have any past experience with it and dnt know exactly where to start. I am full time healthcare professional and mother of two beautiful girls. I have been listening to BP podcasts and about to finish David's book on BRRRR.

Due to so many RE training courses available everywhere online, it seems very overwhelming what to pick and fear of getting ripped off. As a newbie , I need suggestions about initiating this journey. I am interested in BRRRR strategy but with zero RE experience I am afraid that I might end up taking way more wrong decisions than I can afford. I have 50 K to put on a down payment and I am open to out of state investing after getting little hang of it locally.

I am not looking for high amount of cash flow and focusing more on property appreciation and wealth accumulation.

I also wanted to Ask busy professionals with none or limited REI knowledge about their beginning of investing journey, how did you navigate this process, any courses you recommend, how did you find your mentors and what challenges you faced and troubleshooting them.

Any help and feedback is highly appreciated!

Check out New Western, they are pretty active throughout Houston for Wholesaling. 

I would set it up as a Joint Venture that splits profits one way and ownership a different way and reduces risk from the partner. You would prefer 51% / 49% ownership so that if a disagreement occurs on various things, at least one of you can move the project forward. Or, if you choose to have 50% 50% ownership, you can write into the JV Agreement that "scissors, paper, rock" breaks the tie.

You could each have an LLC that joins the JV, that's how I do things, and a single LLC that one of you owns that takes care of the banking. You get into a different world if two unmarried people join a single LLC. Talk to your attorney & CPA before doing that. It gets challenging when one person provides all of the work finding, funding and selling the property and one person doing the rehab.

You have to decide in advance, in writing, in the JV Agreement how to handle inferior workmanship, if a sub contractor is called in who pays for that, who pays for supplies, who pays for overages, who pays for “redo’s” and who pays for missed deadlines. Then you have to cover “what if one or the other can’t finish their part of the obligation and the project languishes". What happens if the Capital Investor runs out of funds, what happens if the GC falls off a ladder and can’t work, what happens if the market chances and it take longer to sell or the sale sprice is less than expected. And nobody will worry about anything, if the earth blows up so you don’t have to include that one. But you get an idea of the number of things that can and have gone wrong in projects like this.

If you are friends enough with the other party, you can talk about who gets which tax write offs. So, it’s a “Trust but verify” type of relationship. It’s a business, the goal is to make money and people have to do their part for the project to succeed. There has to be an "incentive" sometimes.

A lot of these types of relationships work out really well, some don’t, that’s why all of the caution in in order.

1. You should start a new LLC. The members could be your LLC and his LLC. Or could be a combination of LLC and personal names.

2. There isn't a 'typical' split. Could you find a way that each of you are doing a percentage of the work? You should write this work down in your operating agreement. You could also estimate what his labor costs would be. That amount could be his equity part of the investment.

One way to do it:
Maybe he does 70% of the work and you do 30% and then he comes up with 10% of the financing for materials and labor cost and you bring 90% of the financing. Mathematically, he is bringing 70+10 / 200 and you are bringing 30+90 / 200, which puts him at 40% ownership and you at 60%.

Just break it down to percentage of work on the deal and percentage of money brought. Try to avoid a 50/50 split so there can't be deadlock if you disagree.