All Forum Posts by: Marc Pfleger

Would an easier, less complicated option be to purchase the property from the contractor so I own the property outright and then draft a contract basically stating the contractor will be compensated for his time when the property is sold? I do not want to get into the lending game as I know next to nothing about it.

wow, the feedback is amazing. I need to read through and digest all of this. The more I think about it the less I like the deal. Thanks BP. I will do some more homework and probably will have more questions. thanks again everyone!

Originally posted by Bill Gulley:
Need to see your attorney on this. :)

Originally posted by Chris Winterhalter:
@Marc Pfleger

Just placed the call - thanks

what if my llc were to purchase the property from the contractor's LLC with an understanding that a separate partnership agreement will be drafted?

@Chris Winterhalter "The best way would be to have the HML subordinate the loan. But I am assuming that isn't possible for this scenario." I am not familiar with this. Does this mean the HML will hold 2nd position?

the Contractor wants 50% of rehab costs upfront, (not going to happen) then the rest on a draw. We are to have weekly meetings going over the costs, schedule etc... So I will have an "active role" in the partnership I guess you could say.

The contractor does have experience flipping properties and he showed me 2 completed projects and 2 ongoing projects. Clean job sites and quality work. I performed a background check, no liens, judgments, licensed and insured, etc ...

The profit split will be 50/50, the numbers are as follows:

28,209.13 due at closing

25k HML @ 15%

1 yr prepay penalty of 3,750.00

28,209.13 + 3750.00 = 31,959.13 + 35k (projected rehab/holding cost) = 66,959.13 + 5k closing = 71,959.50

ARV is 110K

110,000 - 71,959.5 = 38,040.50 / 2 = 19,020.25 potential profit.

My real concern is that the property is titled in the contractor's LLC, there is money owed and I have no control of the property.

I am considering partnering with a contractor on a rehab and need some ideas on how to protect my investment in the property. The contractor used a hard money loan to acquire the property and would like for me to provide the rehab costs. We discussed putting a lien on the property for the rehab costs which is fine but being that there is already a loan on the property how can I ensure that my interest in the property will not go away if the contractor defaults on the hard money loan? Thanks BP!

made me laugh too, I want a bunch of mistakes like this one, congrats.

I apologize if I violated any rules posting the video but I love that movie and thought it was appropriate on some level for my situation

I am going to be alright, hearing the stories here have really helped put things in perspective and my situation is not all that bad. I have worked as a paralegal for the past several years and realized that I have a whole other network of people that will be willing to help me out with a job if my situation calls for that. Presently I am in a position where I can focus all of my time and efforts on REI. The thing I love about REI is that there are so many ways to make a living. I had campfire lit underneath me when I had a job now that campfire has turned into a bonfire. So I guess there is only one thing left to do

@Mary B.I'll be looking for your webinar within a few years speaking on this very period in time and how you used it to rise to the ocassion and beyond..."

Thanks Mary you just gave me another goal I want to accomplish.

@Shaun Reilly I woke up this morning, jumped right out of bed ready to take on the world, I can not remember the last time I was this excited to go to "work".

I appreciate the words of encouragement from everyone.

On to the next deal ...

Thanks all, you are right @Rob K, after sitting down and really thinking about it, this is the best thing that could have happened. While the future may be uncertain I believe it will be bright.

I have aspirations of running a property management company so perhaps I will start there if I get to a point where I need to find a real job. I do have some cash reserves and I have already started my search for another wholesale or rehab deal. I also thought about getting my real estate license and give that a shot. I also want my license so I can have access to the MLS. I know there are numerous threads about the pro's and cons of having an RE license while investing so I will go back and review. I apologize for the sob story it was a moment of weakness. I have no other choice other than to succeed at this point.

It is almost dinner time, hello Ramen noodles.

Thanks again everyone.