How would you finance your first deal with my situation???

[Nick Tolson]

Hello all,

I've been in real estate for a few years as a project manager for a developer and Realtor on the side, but have never done my own deal. My dad is an engineer full time, and General Contractor/Mechanical Engineer on the side. He's built/rehabbed (but never participated in his own deal) almost 100 units in the past 25+ years under his license so he has a good handle on construction costs, timelines, and good subs. He, my brother, and myself are looking to rehab and flip our first home in the Los Angeles area.

We've found a few properties that pencil out to this: $700K purchase price, $150K in rehab/repair cost (adding a room in most cases), $1.05MM ARV.

The numbers seem to work out and the above numbers are conservative, but I want to know the best way to parlay our resources and situations so that we can maximize profits on our first deal.

Resources to consider: 

• Brother: $45K in cash, Great Credit & Income, Has never purchased a property
• Dad: ~$1.7M (I think?) between his 401K and Roth IRA, Decent Credit & Good Income
• Parents' Primary Residence: Valued @ ~$650K, $240K Mortgage
• Parents' Income Property: Valued @ ~$550K, $230K Mortgage
• Me: Will be contributing the sweat equity and putting the deal together; also throwing my commissions (2.5% of PP) from buy and sell side into the deal/pot.

Knowing the above, how would you finance this first deal? Is FHA, first time home-buyer a good option? Stay away from Hard Money on this first deal? Do Conventional Loan? HELOC or Refi+CO on one of our owned properties? A combination of the above?

Thank you very much for the advice in advance!!!