All Forum Posts by: Todd Rizzardi

Hi. A friend of mine has a residential SFR with an ARV of ~$400k in Southern Cal here where we live, and is asking me for help to fix n flip so she can cash out of the property. 

She owes $257K. I have the cash for the rehab which I estimated about $30k. 

Let's say for round numbers the potential profit is $100k. First I will take my $30k back so then there is $70k left over. I will factor in realtor commission etc afterward.

First Question: What is a fair way to split the profits with her? Considering I am putting up all the money for the repairs and managing the rehab. 

Second Question: How do I write up a contract for something like this since I am not buying the house? How do I secure my position? Does anyone have such a contract I may use as an example to structure this type of deal? 

Any other suggestions are most welcome. Thank you kindly for your support. 

 Im in the process of doing this myself and considering those same options. I'm not sure either what the attorney brings to the table but I did some research and it seems pretty simple to go directly to the california state website and download the forms. Please let me know if you come up anything else. 

ALSO, very important. Wait until January before you file, otherwise you will get dinged $800 for the year 2016. You probably already know that. 

@Michele Redd You are very welcome! As @Jessica Zolotorofe mentioned, this is definitely true. In commercial real estate, this is almost always the case where the general LLC will buy an asset, like an apartment building or a retail strip center, and then form an another LLC just for the property. The reason for this is because commercial properties produce income and have expenses like any other business. It is less common to buy homes with LLC's but in some cases there are reasons to do so.

The reason you might buy and then sell a property with an LLC is because in certain cases you are forbidden to sell the home within 90 days after you purchase it. I believe this is the case if you were to buy a HUD foreclosure home, for example. So the LLC is a workaround... You sell the LLC, and the home is an asset of the company. You are technically not selling the home by itself.

This is sometimes the case for short sales too. Some banks will stipulate that 90 day thing in the contract.

@Raven Dillard  Flip is part of the Gary Keller series and written by Villani/Davis and The Book on Flipping houses is a Bigger Pockets publication written by J Scott. You can find these on Amazon pretty easily. Good luck. 

I would highly recommend these two books -- "Flip" and "The Book on Flipping Houses." That should get you started in the right direction. 

@Conor Colburn Yes, its right next to the new Costco. I will post the invite back here when I get the next one, but its every 2nd Tuesday of the month starting at 6:30pm. So that's July 12th. I'm interested in learning more about your business as well, definitely. ttys

Hey Conor.  I'm in woodland hills. There's a meetup every 2nd Tuesday of the month at Panera bread in woodland hills at the new shopping center the village. I will send you the details when it comes up. Sending you a request now. It's actually the same guy that does u urban cafe in sta monica mentioned above. 

Congratulations on your new found focus, Psychology is 80% of this business! lol