Miami

8 Replies

I want to start my first flip this summer. I just want general advice as far as whether I should go with a hard money lender or not.. or possibly find a partner to go 50/50 with. Meaning my partner finances the flip and I manage it. Any replies would help! Thank you!

- Manuel Marine 

@Manuel Marine If you have the 30% (give or take) that a hard money lender will require that you bring to the deal, then it becomes a matter of the numbers in the deal + personal preference...How much do you estimate your profit would be if you went each route? Do you want to give up equity or do you just want to pay the hard money points and interest? If you don't have any cash to bring to the deal then hard money is likely out of the question.

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@Manuel Marine About two months ago, you wrote the following post: "I want to start my first flip this summer. I just want general advice as far as whether I should go with a hard money lender or not.. or possibly find a partner to go 50/50 with. Meaning my partner finances the flip and I manage it. Any replies would help! Thank you!"

If you have not resolved your dilemma regarding which route to pursue, I have a proposal that may interest you. If you are interested, please feel free to reach out to me.

@Manuel Marine

Welcome to the forums.

In regards to your question, I would definitely partner with an experience flipper or investor before jumping into your first deal. Miami is a very trick city and you must be very familiar with the major markets and sub-markets to succeed. You must know the acquisition prices intimately, the market rental rates, and be a very strong operator when managing the properties. Prices can increase (or drop) dramatically within a few blocks, and you do not want to be caught overpaying.

Moreover, you need to use a contractor in Miami that has a demonstrable track record, is investor friendly, and understand real estate principles intimately. Most contractors I dealt with would just try to charge the most money they can and not try to point out ways that can reduce costs while delivering the finished expectation of the product )which varies, i,e, a $200k single family home rehab vs. $1.5 million mansion rehab vs.4 unit multifamily rehab).

I’ve partnered with investors where they provide the capital for the acquisition, and I will invest my own money alongside them as an investor and manager from top to bottom – utilizing my construction company to fund the entire renovation + property management and final disposition of the property (if it’s a flip). Other times we will refinance the property, return all investor money (including mine) and hold a property indefinitely for the long term J I also even bring the deal to the table most of the time for the investors who I have worked with a lot and trust my track record.

Just food for thought. You can learn a lot from a mentor, but in my opinion, don’t pay for a class or seminar. If you are going to find a mentor, find one who is willing to put skin in the game with you and offer the value that a true mentor should bring.