Matthew Paul Ideally best to keep looking, assuming that you have the capital available to take on a second deal.You can always get the property under contract with a goal to close once you are done with your current rehab.

I personally don't flip and have no experience doing it, and it would take higher capital in SoCal/San Diego so you'd want to have a feel for what you are doing, but I certainly think flipping is the more profitable move with where we are in the market right now (super high prices).San Diego most definitely won't hit the 1% rule.

At his age, he’s probably not looking to 1031 exchange them into more property and wouldn’t want to deal with capital gains unless he needs to and doesn’t want to be soneone’s note holder on seller financing.Then again, maybe he just likes hording hard assets, like the rarely used car in the garage.

Once you have enough capital for DP on hard money loans this will be absolutely necessary if you want to make it to the big leagues.God bless.

@Nicholas Jestus Capital expenditures are not included in the Net Income.Your goal to nail down the true number is spot-on. 

And finally, by focusing on becoming the right person through habits, you will have had the opportunity to save your own money to invest, or better yet, become attractive enough of a person to attract capital from your future mentor and/or other partners.Best of luck in your future!

There's a lot of discussion around partnerships, private lending, and hard money, but I don't see much discussion on the actual mechanics - what these arrangements look like in practice.My hope is this post can serve as a reference for those starting out, so we may get a better understanding of how these strategies are actually implemented as well as an ability to more accurately predict the profits and returns you and your lenders and partners can expect.If those with more experience would like to revise these numbers and statements, it would be most appreciated.These scenarios assume you, the flipper, are bringing none of your own capital to the deal.Typically, this would mean 1 of 2 scenarios...Private Lending - Someone you know brings 100% of project costs (purchase, rehab, acquisition costs, holding costs) to complete the deal and in return, they get a certain percentage return which comes out of your profit.Hard Money + Partnership - You get a hard money lender to cover 80-90% of purchase+rehab and a partner to cover the remaining 10-20% as well as acquisition costs (including hard money origination and points) and holding costs (including hard money interest payments).An aside about the structuring...Private Lending - A promissory note is created, and your private lender lends to you or your business. 

Additionally, you must be sure to keep enough cash in the account to pay for all expenses associated with that investment (taxes, insurance, utilities, repairs, capital expenses, etc) as you may not combine your cash outside of your IRA to pay these items.

The 6 month seasoning would allow the cashout to recover all the invested capital by basing it on appraisal price. 

I am looking to get started wholesaling and build some capital to do some fix-n-flips in the next couple of months in Georgia.