All Forum Posts by: Steve S.

Good points. I guess I am thinking worst case scenario if you use someone elses money and everything goes wrong after you calculate all the numbers your not losing your own cash.

Would you use a hard money lender or your own cash to pay for a flip (property + rehab)

I can see advantages to both.

Using your own money you save on the cost of borrowing it and the fees and such hassle of getting it. This seems that the risk factor is alot higher.

Using someone elses money, you pay more to have it but more of your own cash stays in your pocket. This seems that the risk factor may be lower.

What are your thoughts on either.

Great post. I was interested in getting the same license and was going to ask the exact same question you beat me to it!!

Ok so was talking with the gf tonight we def agree with everyone here. As far as the plan goes right now I am attending some auctions in my area to get an idea of what properties sell for as well as checking out lots of houses on mls in the same area to better my idea on pricing. Met up with a real estate guy who flips houses on the side. Made a handshake deal with him I would use him to list a property when it sells in return he will help me find something that the numbers work. Hes finding me comps on all the auction properties before I go so I feel like I am off to a better start. I am looking for something that is not financeable (sp?) through a conventional loan.

As far as the repairs I think I am just going to make them myself. I know a few people who also renovate houses and they turned me on to some cheap guys who they said were good and work was slow. So I am building my contacts at the moment. Before I buy I want to spend the next few weeks making contacts and learning property values inside and out.

As far as construction and repair costs what do you guys recommend me to do. Learn them or have bids put in to me before I make the offer where possible.

Wow thanks for the ton of responses. All great information. Its tough because I dont know anyone around here that does this successfully to learn from. Glad I found this site.

Having this be my first time I wasnt sure what to expect as far as a split. But upon further review its clear that I need someone to take the risk with me. We win together, we lose together.

In the above scenario I never felt comfortable with him getting paid weekly. Especially since I have to wait to get paid in the end. Worst case scenario if all does not go well he walks away with a paycheck while I walk away losing money, interest on that money I could have had, time, and sanity!

Now If I was to borrow the money from a hard money guy then I guess this deal might be more worth considering. If the house didnt work out for whatever reason it wasnt my money that was lost and I was only losing a minimal amount which would make it worth the risk of trying.

As far as his business info. He is a registered business that does construction and building. He has liability insurance. He said that his guys are covered under that. NH requires a licensed plumber and electrician. But has no other liscensing stipulations on who can remodel or build. He said that since I am the homeowner I would pull the permits to do the renovations.

At $3000 a week I could def hire a couple qualified guys and supervise them myself with no profit share in the end.

So back to the drawing board. Someone mentioned wholesaling. I may look into this. Another person mentioned buying the houses that arnt approvable for conventional or FHA loans and prepping so that they would be approvable.

Glad I found this site. My name is Steve and I am 32 years old. I currently own a wholesale company for autos and powersports. I am looking to get into home flipping. I have a contractor buddy who approached me with the idea.

Heres the facts.

I am the investor (money guy) Cash in hand. Going to finance all the house and repairs from my own pocket.

He has a small construction company and is somewhat slow on work at the time. Himself, part time brother and friend that work for him.

What he proposed is this. I buy the house. I buy the materials. I pay his guys unmarked up salary (1100 per guy which is $2200 a week for both workers) plus $800 a week for him. Thats $3000 a week for him and his 2 guys to work on the house that I would pay weekly at the end of the week. In the end we do a 70 / 30 profit split the larger portion me.

Ideally I am looking for someone to take the risk with me. In this scenario he assumes no risk. They get paid and if the house doesent sell its me holding the bag or taking a loss.

Ideally I would like to find a contractor who will do the work and take a share in the end. That keeps more money in my pocket and gives me a larger buffer for a safe zone. If it all goes wrong well at least we both lost something not just me. He cant afford to front the guys money and not make money until the house sells so he wants the weekly money.

Whats my money worth? Should I charge to bring it to the table?

He wants to get total junks for like 100k and fix them and remarket them for 190k. I more or less want to buy properties for 150k+ that need paint and trim and do them myself stuff that someone lost but didnt thrash or maybe someone ran out of time and the bank took it and sell them for $190k I would make less money but wouldnt have to split it. These are just examples not exact figures you get the idea

I am a handy person. Like I said I repair vehicles, boats and such so I am very hands on and very capable. I also have construction equiptment that I own myself (bobcat and excavator) that I could do yard work with or septic work etc.

Please tell me your thoughts. I am tossing the idea of doing business with him or also the idea of doing it myself. Please let me know what you think is fair and has worked for you in the past as far as a profit share in this kind of scenario. Thanks in advance.