All Forum Posts by: Patrick Daniel

It all depends on a number of things:

1) What are your goals? Do you want to have a truly passive investment where you buy and then turn it over to a PM or are you going to be hands on and manage yourself?

2) What do the numbers need to look like for it to be a good deal for you and ACTUALLY cash flow? Are you looking for cash flow or are you looking for appreciation?

3) How handy are you and your wife? Are you going to do rehabs yourself or hire it out?

Once you know all of those answers, it will make it a lot easier to answer your question.

Good luck!

If she is taking on mostly an advisory role, and having you run it, 50/50 sounds fair, but I don't know her requirements for a deal to make sense for her. I would find a JV form on here and agree to terms and then spend a few hundered dollars getting a lawyer to do make it official and legal for your state. That way when you do JVs in the future, you will have an agreement that you know is legit in case something goes south.

Good Luck!

I have used a M2M lease that states if they stay less than 6 months, they forfeit their security deposit. This keeps the renter from wasting our time.

 Nathan, that is really interesting. In Washington state when I worked for a PM, if a renter moved out but was still on the hook due to lease, we could only charge them up until the date that the new renter moved in. Are you able to get around that because you are charging a fee that "happens" to be the same amount as 2 months rent? Sounds like a good way to protect your bottom line.

I would remove them. The LLCs are less likely to be willing to make the deal at a decent price even if they are willing to sell.  But that is just personal opinion. 

Jorge,

I think that giving people too much help in the beginning is a disservice in the end. Its like the "Lead them to water but can't make them drink" Or the Moth in the cocoon analogy that @Brandon Turner used in one of the recent podcasts. 

I am still a fairly new investor, but I know that while I could probably have done twice as many deals by asking others to give me the answers, I would not have built up the grit and have the buy-in I do now to stick with it because of the hard lessons I have learned.

That's what I love about this community at BP. people are willing to point the way, but generally only help people to the point that others can help themselves (If that makes sense).

P.s.... How do I get that list? ;D 

I would highly recommend signing a Joint Venture agreement that spells out exactly what each of you are responsible for and how the profits/losses are split. 

Are you finding the deal and she will be funding a large part of it? if so, then 50/50 sounds fair, but if she is finding the deal and funding, then you are probably going to need to ask for a smaller piece of the pie. maybe 30/70. Either way, if you are getting more experience that will help you grow, a portion of a good deal is better than all of a bad deal.

If you are someone who is very comfortable with high amounts of leverage, then interest only is okay, but I am a little more conservative. If you are not having to make principle payments, then your cash flow is better while in theory, you are still making money through appreciation. That is a little too speculative for my comfort level though. 

 I think Tom is right on with this! Since you already are aware that appreciation is lean in your area, and you don't know where the market is going to be in 5 years when the balloon payment comes due, I would try to pay down as if you can. UNLESS you have a large amount of liquid assets available in the event you need them, but still the long game wins.

Best of Luck.

Hi Tina, I think it really depends on what the wholesaler is able to get the property vs. its market value. Many wholesalers will look for a certain amount that they can make off of a deal, and some go off of percentages. I live in a lower priced market, so the 8% for most houses wouldn't be much. 

Looks like some of the wholesales in California are much more lucrative than what I am used to!