I'm 26 years old and looking to do my first flip. I have been around real estate investing for a few years now. I have worked part time doing property management and flipping with a family friend who has been investing for 10+ years. I have currently left my job and started working with him wholesaling here in our market and I bring properties to investors. I have found a property that I want to flip but will be bringing no money to the deal. As I have a great mentor and I do have a large group of investors here in the area who are very helpful, I want to reach out on here to get as much feedback as I can. I have a list of about 5 people who I want to ask to be a private investor. What is the best way to go about asking? What all should I have prepared to bring to them so they know I can do this? I have done a complete detailed walk through of the property and have already got a detailed breakdown of supplies needed. What else should I have prepared? The only exit strategy I have is to sell the house for what the investor invested and I would walk away with nothing after doing the work. Should I ask for more than what I think the estimated repair costs are so if I run into something unexpected? Any feedback would be great, just try to keep your replies simply worded as I am still all new to this and still studying the real estate language. Thanks guys!
I would have a detailed pro forma outlining exit strategies, renovation costs, your track record, potential profit, comparables, and time frames.
You could always offer the deal to one of your regular buyers with no fee with the understanding that you want to be involved and get paid when it sells. I would really work on getting another exit strategy.. Rental.. Lease option. Seller Finance. Credit partners. Something.
I would agree with everything @Ryan Dossey mentioned. In addition, I would simply ask your investor friends what they would like to see from you and the deal. If you have a relationship with them, they should certainly take some time to sit down with you and tell you what they look for in a deal.
Personally, I love it when a partner tells me all the way that I (as the money guy) will be protected if things go south. For your first deals, you might want to consider the possibility that you might walk away making no money. Consider this a great free education and now you will have experience to take to future partners. Please don't think that the worst thing that could happen is that you walk away with making no money. If the deal goes south, you are going to go down with it and you could end up having a very expensive education if you are not careful. Because any investor is going to insist that you personally guarantee their funds.
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