All Forum Posts by: Sean Brennan

Aaron Norris So, if the GC funded all rehab costs, do you agree that a 50/50 split of profits is reasonable?

If the GC didn't put up any of the money, what kind of profit sharing incentive would be reasonable?

So something like this?

Acquisition: $180,000
Rehab: $30,000
Selling/Holding:20,000
ARV: $300,000

Funding:
Hardmoney: $150,000
Me: $50,000
GC: $30,000 or as low as he/she can get it

Yea, I didn't think too hard when giving those numbers.

So basically GC takes care of all the cost to rehab, I fund/find funding for the rest of the costs, then split profit 50%/50%?

Here are some simple hypothetical parameters:

Acquisition: $200,000
Rehab, Holding, Selling costs: $40,000
ARV: $270,000

Funding:
Hardmoney: $150,000

How would you split up the remaining equity funding ($90,000) if you split the profit with a GC?

I just read a nice blog by Mike LaCava about flipping houses:

http://www.biggerpockets.com/renewsblog/2013/02/03/flipping-houses-with-no-money/

I found the idea of partnering with a General Contractor very appealing. Perhaps I could find a deal, put up some of the money and get a general contractor as an equity partner. I think this would be great because I have no construction experience and would love a highly motivated GC on my side.

Has anyone done this or have any ideas on how a deal like this could be structured?

I am trying to further my RE investment education myself but I have a few suggestions.

Its a little expensive ($125), but I just finished listening to the audio recordings from the BP Summit... it is about 20 one to two hour presentations on a broad range of topics... I like it because you can learn in the car, while working out, or doing medial tasks.

You might consider a real estate appraisal course to learn about valuation. The appraisal institute courses are usually high quality but also a pretty expensive.

I am reading Marty Boardman's book about flipping houses and it is an excellent overview of the process. Also, check 123flip.com on this topic.

Finally, I am going to my first local real estate investment on Weds. It will be a great way to meet people in my community and learn from actual investors. Hope this helps!

Congrats Shaine! Sounds pretty sweet.

I don't have answer to your question but I wanted to compliment on your new profile picture. Your other one looked like you were ready to kill someone! ha.

I have yet to make my first investment but hope to soon. If I were you I would exhaust all free (biggerpockets) and low cost (books, local REI clubs) first before paying for a coach. Get out there and talk to people in your market and you may realize paying for advice is not necessary.

Joel Owens Brandon Turner

Congrats Brandon, that is a great story!

Yes, I agree cap rates go up as I move further from Boston or to less desirable locations. I am appraising 36 units in a less desirable suburb... I am going to guess the cap rates are around 7%. I will be digging into that this afternoon... hopefully I don't spend too much time on here today!

Small world Joel, yea, Chelmsford is okay :)