All Forum Posts by: Jordan Jackson

@Jason Bott thanks for reply. Looking for flip insurance , sent you connection request so we can pm

Asking again if anyone has used them?

Finally under contract on 1st property! It's a BRRRR, paying $40k cash, needs ~$7k of reno, ARV should be $55-$60k and rent for ~ $800-$900. I am providing all the cash, analysis, and keeping future books/managing cashflow. My brother in law is supervising the renovation, including performing most of the work himself(would be closer to $12k without him), he will be responsible for property management, and performing any future maintenance work that arises without charging for his time, only supplies.

We are forming LLC, my question is what is a fair division of available cashflow (after loans, reserves and any other cash expenses). On one hand I am taking on all the financial risk, and using my w2 income and good credit for evenual refi and he doesn't have the cash, credit, or w2 job to do this without me. On the other hand, he is very handy and will save me alot of money both upfront, and ongoing basis by fixing things himself, and dealing with tenants (this is a class C property). He grew up in area, knows people to get things done cheap, and I wouldn't be as comfortable doing this without him. 

He is not a numbers guy and will likely agree to whatever I propose. I want to make sure I am fair, and he makes more than I would pay a property manager in exchange for piece of mind. Goal is to have this be win win so we are both motivated to do alot more of these. 

Based on me fronting all cash, likely having to leave some in deal, I was thinking 2/3 split of profits in my favor, and 1/3 for him but would love some feedback from the community. Wish us luck!

@Alex Jones Hi Alex, I am doing this with a partner, a family member, who is a contractor that is going to complete the rehab and ultimately the property.  We also have an agent who is putting the purchase offer in and finding initial tenants. 

@Haven M. I should calrify, i have the down payment for several properties, (ie 25% of 50k each) not cash to buy outright. 

 @Jake S. thanks for chiming in. The property I am making an offer on at $30k, we will put 10-15k into it , and hope it appraises around 60 to be able to pull the bulk out of that back out. Wish me luck!

Details:

I have solid w2 income, good credit, cash on hand, a local lendor willing to do mortgages down as low as $30k (after 20% down), and a family handy man to handle most repairs and rehab work. In a hypothetical, properties in our area can be had for $25-$50k, fixed up for ~ $5k, and rent out for $800-$1000/month. I only have 2 mortgages in my name so could do a couple of these, and my wife has a good w2 job so theoretically have a long run way before i run out of traditional financing. I'm not looking to do 30 of these my first year, and have the cash to support a more modest 5 or so in next 12 months, so, my question is BRRRR even necessary for me at this point in my journey?

I get the appeal of BRRRR for those who lack cash or want to scale faster, but to me it seems like I am introducing unnecessary variable/interest expense in taking out some kind of high interest LOC (sofi offered unsecured $100k at 9% or my bank will do secured $50k at 7%).

Interested in any perspective, thank you. 

Anyone get pushback on the online apps? I'm not nervous about visiting properties just dont want the hassle. I know a lot of tenants in Lower priced rentals dont do online banking so not sure how to force the issue there

To clarify, I do not have the time to become a licensed realtor or mortgage broker, ( I have a 9-5 and these are side projects).  I am also not looking to skirt the system and get "kick backs" from a realtor or mortgage professional, which I would plan to use. The "kick back (your words)" would come from my friend, and i would be 100% transparent about it. 

So said differently does the extra time/effort I put in to finding property, running analysis, finding realtor, property manager etc since I am local justify asking him for a bigger split of the equity than my cash contribution would justify? IE we'll split profits 50/50 but he has to put up 60% of the capital? Just want to be fair to him and seeing what others have done to get a baseline. 

I'm in Delaware and have developed some actionable investment (buy and rent/hold) opportunies I am acting on with partners. When mentioning this to out of state friends, they want to get in on the action. My question is, what is a fair structure to propose for my efforts, ie its my idea, I have ID's properties and run analysis. I have a property management and maintenance solution to offer them as well so it is basically hands off for them which is why they are interested. 

I don't want to be greedy so curious if other have done this or what they think is fair? IE a flat $1,000 per property and its all thiers, or maybe something like like a 5% bump in my equity share vs what I cash contribute? IE I kick in 10% for upfront costs, but am entitled to 15% of ongoing profits?

Thanks in advance!