All Forum Posts by: Pete Bauer

If you got your current duplex less than a year ago you'd be violating the deed of trust by renting it out which will cause the new lender to balk. Sometimes you can get an exemption for a reason like new place is bigger, in a better school district, or job relocation, but your case seems weak to me.

Sure, but if the house is in very bad condition you may not get a conventional loan on it.

@John T. There is a startup called RentBerry that operates as a rent auction, you might want to look into it. No issue with fair housing - there is no protected class you are discriminating against by running an auction.

Yes, I am fronting all costs, including material, so I am taking on all the risk. The partner will effectively get his 5k back in 5 weeks and then I'm fronting him 1k/week. But he'll be there 5-6 days a week working on it himself and brings in experience, tools, etc. I agree it's hard to say what's 'fair'... 

I have a couple investment properties but I'm still fairly new to the game. I just got into a JV with an experienced contractor on a fix & flip and was wondering what kind of terms are common. It's a done deal now, just wondering if you think the deal is fair/in-line with market for both parties.

Property is a rural SFR that became bank-owned, squatters moved in, and trashed the place completely. It was a complete gut/rehab. Someone bought it from the bank for $65k, put on a new roof, new siding, gutted everything inside to the studs, new plumbing and electric. We bought it for $110k, and figure we'll throw $70k at the thing for a nice finish. ARV is $260-$280. It would rent for $1600 if it came to that.

Here are the terms of the deal: I put up all the money except $5k. Partner puts up $5k initially and gets a $1k/week draw against his profit share. He does all the work. (We figure 12 weeks for rehab.) Profit split is 50/50. He gets one helper at $20/hr which will be a cost to the JV.

What do you think of the deal? Fair for everyone?

When you formed the LLC you specified a manager, most probably yourself. The manager has to sign contracts on behalf of the LLC, so that would be you signing.

@T.Yong Ling you need to do more shopping. I just closed on a 30 year conventional investment property @4.625%