All Forum Posts by: Moshe H.

@Thomas S., thanks for your advice as well.

So 58-42? ;-) Ok, I get the point, thanks!

 Of course it's important, but I will be doing the visits, inspection, getting contractors, renting it out, dealing with tenants, and basically handing it to him on a silver platter. So I thought that should be worth a higher %. So I'm not at all discounting the importance of the money. I'm also putting in half! That said, I will definitely take your suggestion seriously. Thanks so much for your input.

I am just starting out and I'm thinking of investing in a property with a friend's private money. I kind of pitched the idea to him to see what he would think. I proposed we split the down payment and closing costs 50/50 in exchange for a 50% stake each in the equity. Since I would be doing all the work and he would just be providing money, I suggested we split the cash flow 25/75.

Now I'm wondering if that sounds fair or if I'm being too greedy? I guess partners can decide whatever they want between themselves, but is there a such thing as "typical" here?

I have not yet done any rehabs myself but I have heard from a couple different sources close to the business that legitimate contractors should have the cash flow to be able to do each stage of work and then get paid for it after. When I was considering a remodel on my own home a friend who used to be in construction warned me not to pay until the work was completed.

Following! I'm interested as well.

@Harold Snowden Credit card cash advance will only cost you like $15. Wouldn't that be the easiest way?

Nice to meet you, @John Place, welcome to the forums. I'm in lower HV but also interested in investing a bit closer to where you are, where the prices are believable.

Right, I guess it depends on how much cushioning there is in the buyers' DTI ratio. I just know that when I bought a primary residence 4 years ago I had to jump through some hoops to prove the money I used for the down payment was my own, and I didn't owe it to anyone. So I guess different lenders will treat this differently.

@Roland Brown, I don't think it's hard at all to use the money for hard money lending; the question is  lending to the right people, properly underwriting the loan so that you minimize the risk - or having someone you trust doing that for you. Joint ventures are probably the most lucrative form of hard money lending. Basically, you are giving money to a flipper and splitting the profits with him. S/he needs you, because without you they won't have money, so they'll often be willing to split 50/50 if the deal is good enough. I found some guys out in CA that do exactly this, but on multi-million-dollar luxury properties where the margins can be much higher. Think buying a 50-year-old home in a posh neighborhood for $2 million, sinking about $2-3 million into making it a state of the art mansion and reselling it for $10 million. Even with taxes, insurance, interest on first-position loan, half a million in agent commissions, etc., you can still realize a profit of $3 million, which means $1.5m for the investors. Wow! I have never done a deal with these guys before but I did a lot of research and it looks good to me. I'd love to hear from anyone on BiggerPockets that has done deals with these fellows.

theturnkeyinvestor.com

Pete Asmus, Ivan Oberon and Ryan Garland - Paradyme Investing.