Again, I reminded them that if they were in trouble, rent wise or anything else, they should reach out to us. 

I went and viewed 80% of his properties and picked the one that makde the most sense numbers wise.

I can see that it is a wise idea to have reserves, but is it required?

The situation would be that my parents own a rental property and we would be 'acting' as property managers for it, so profit wise, we would get a % of profit from the monthly rental income (also are there any restrictions within an LLC in this context as far as what that % can be?)

I know my numbers, have the subs and the knowledge of the local labor market along with the remaining manpower from our contracting company in addition to my skilled labor daily working on the flip and managing the project.With the knowledge that I would be looking to raise roughly 75k and having 5-8k in the game ourselves for a 6-8 month flip from close to close, what would be fair rates either interest wise or even equity wise from a private investor(s) IF we are also willing to back the investment with a free and clear, cash flowing property as additional collateral to effectively de-risk the investment to almost 0 for the investor.

We are here to continue our learning journey as we prepare for the next opportunity.Mid term goal - achieve 10K/month in passive income through Real estate and continue learning/acting/growing into wise investors.

@Tim Delaney just the answer I was looking for 👍 thanks for the wise answer

HI Steven,1) Any 1-4 unit property2) Its basically just like any other FHA loan with a construction component designed to release money to your contractor to do work on your property whether it be a purchase or a refinance of an existing owner occupied home (key is owner occupied only not investment not second home)3) there are limits to how much construction or repairs you do generally the rehab cannot be more than 75% of the total cost of the project upfront or the after repair value (ARV) appraisal so basically no gigantic repair projects4) luxury upgrades will not be allowed and no detached ADU's or accessor dwelling units 5) qualification wise you qualify like any other FHA loan you'll want to review your income/assets/credit and figure out what your max purchasing power is so lets say its 500k and you find a 200k property then you know you can squeeze in 300k of repairs potentially.

Also, I don't think it's wise to buy a house from your best friend at a discount.

If its a property that needs endless maintenance on the other side of town then its wise to use a PM.