So, the real estate broker/agent would have to inform the seller of the fair market value of their home, making it much more difficult to earn a profit larger than what a real estate commission would be.  

I accepted the family with a larger security deposit. 

Are you looking to increase cash flow with every sale and purchase or keep building equity to buy a larger property down the road?

A minor hurdle for some, but a larger issue to some as well.With DSCR or private money lending, yes, you can still also vest in your individual names, but you will find many lenders will NOT allow it or will actually charge you higher rates to do so. 

Or even purchase something larger such as multi-family or commercial that provides better cash flow. 

And I suspect the other larger players in CA had the same arrangements we did. 

All of my investing has been in re-development and I’m looking to learn the flipping business for income.I can see the process and opportunities for properties worth flipping, but I’m trying to see the way to build a business around flipping for income while I work on larger re-development opportunities.where have you learned financing and operations?

It’s not an easy rule to follow as there are many ways to get sucked into investing a larger sum, especially in the private deal arena.  

This reserve amount represents roughly 2–3 years of projected repair costs, which might be a conservative approach, but it gives us a buffer for unexpected, high cost repairs when they pop up.With a larger portfolio, the reserve pool wouldn’t need to grow proportionally, as funds and repairs can be balanced across properties, allowing costs to offset each other over time.

In larger volume, you can get better return.