I have a question and would really appreciate your input.I’ve done a couple of fix-and-flip projects in the past using hard money lenders, but I’ve noticed that their fees and interest rates significantly cut into my profits.

.Seems Pace Morby is doing this with people in foreclosure for "foreclosure avoidance" in AZ, TX, GA, NC, FL, CA and other places according to him. and says it is very profitable.

My humble advice to anyone attempting to do creative finance is:Creative finance is for experienced investors who have access to capital if anything goes wrong.Learn the lawsDon't use a contract "off the internet", laws vary by state and are also regulated on a federal levelLearn the financing techniques correctlyDon’t skip parts of the processDon’t ever do a “kitchen table” closingUse the proper deedAn attorney can help you with the legal work, but the rest you are on your ownYour guru will not bail you out“Investing” in someone else’s deal by providing a small 2nd loan so the “investor” can pay for “cash to the seller” and for “closing costs” so he can do the deal is a very bad planKnow what problems can ariseLearn the responses and solutions to problems before they are neededKnow everything there is to know about Title and what that meansKnow who a "protected class" individual isLearn the "back doors"Learn human natureUnderstand timelinesUnderstand regulation enforcement (some of these "mistakes" have a 10 year statue of limitations ( they can charge you 10 years AFTER you do the transaction) and carry hefty fines and possible imprisonmentThe court doesn't accept "I didn't know" for an answer"Know that the source of the lead plays a serious role in some states and federallyKnow how much of a "profit" pushes the boundaries to invite an investigationYou can be sued by the seller if you don’t do things correctlyYou are automatically at fault if an investigator or attorney or regulator gets involved.

2 or 3 bedroom properties would be more profitable considering their cost?

@Jay Hinrichs exactly the risk is even more than traditional development and the profit is actually less with more operational headaches.

To establish a 50-50 ownership in both the property and future profits, you'll need a formal agreement outlining each person's contributions and rights.

The $10,000 yearly maintenance fee is really hurting your cash flow, as it’s eating up all your profits.

Make it a habit—underwrite one deal a day until you get the hang of it.The tougher part, and I think what you’re really asking, is how to turn solid underwriting into a profitable deal.

I don’t have a loan on the property and hold it cash, but, if I sell it would lend the profits as hard money and earn 10%+. 

Budget carefully, prioritize high-ROI renovations, and adhere to strict timelines to maximize profitability.