Another way to access funding 4 a small rehab?
So many lenders will not touch a small deal. Could this be a remedy and if not why not?
1. Assume there are 10 investors in the City X who purchased with their own money 10 properties. Each property has ARV significantly larger than the price paid.
2. The 10 investors now form LLC for a very specific reason to fix and sell and repeat the cycle.
3. A private party able and willing to finance all 10 rehabs comes along and joins the LLC as a partner #11. His % of the company corresponds to the total amount
due to him at the sale of properties.
QUESTION: How secure or not secure is the investment of the partner #11? Under which scenario could he experience a loss? (The exit strategy is a group Y concentrating on purchase of fixed properties to lease or re-sell)