How to Find a Partner to do all the work

10 Replies

Hi there,

BLUF: I have [some] money, but not time. How do I find/vet/choose a BRRRR partner?

Back story:

My wife and I have had plans to buy a large farmhouse on acreage, but after finding out that we're expecting our first child, we've decided to stay put in our starter home with $100k equity right next door to an elementary school that we were planning on renting out and cash flowing $400/mo. But we'll stay here for now. Therefore, instead of making plans to buy land and build, I'm looking to finally start investing in real estate after 1 year of sitting on the sidelines! My goal: Purchase my first investment before I become a father in late April/early May.

I'm very committed to my job as a mortgage loan officer, and have a reputation of availability. It's my competitive advantage, and I love what I do with no intention of quitting any time soon. But I'm commission-only, and love the idea of creating a passive stream of income "just in case" and eventually paying off all debt and retiring at a ripe old age with $20,000/month of pure cash flow and 0 mortgages. 

Currently, I could probably use a HELOC to take out $50k, have $20k in cash, and a $23k credit card that I can use for rehabbing, for a grand total of around $93,000. I have more of course, but I'm pretty sure this is the most my wife will let me get away with. Everything will have to go through her - the deal, the partner, the tenants - for final approval. Especially the partner, so I want to be prepared with how to present this idea to her.

Anyway, I can't commit to spending a ton of time analyzing deals and doing rehab work, so I'm thinking the best way to go about this is to find someone who needs someone with money, and is willing to do a majority (90%?) of the analyzing, 99% of the rehab, and property management. I'm thinking 50% equity position, 50% cash flow, and 100% property management (5% of gross rents, if self-managed). That's fair, right?

Problem is, I have no idea how to find people who know what they're doing - Those with experience probably don't need the funding, and those without the funding probably don't have experience. Obviously, there are exceptions, and I want to find them. But how?

I'd like to do my first deal in my market (SE Washington, specifically the Tri Cities) to gain the trust of my wife, but otherwise I'm totally open to investing anywhere after that.

@Sam Fickel Have you though of investing in a syndication?  The advantages of syndication are you are a part owner in the property, you get cash flow, plus the tax benefits of ownership. You only need to invest your money in the syndication and that's it.

You will need to spend time to get to know the sponsor, but once you find one to invest with, there's little work on your end.

In many ways, a syndication is a better return on your investment than a traditional partnership. It's not for everyone and there are usually specific requirements of the investor. I'd recommend you at least look into it as an option.

Best of luck!

You’ve got the right idea to partner with someone.  I’m gonna second the advice of a syndication and do that until you have a little more capital.

Finding a partner as you described is a great idea.  There are a lot of people out there that think they know what they are doing.  Or want to try to get into real estate.  I would be very hesitant to put any money with someone on a local brrr project without having a lot of oversight and know that if the partner flops I could take the project to the finish line.  

You might start advertising on Craigslist for contractors that want to own real estate.  Keep connecting with people on here who live in your area or close.  

Definitely keep saving, using your credit card and heloc at the same time is risky.  I would suggest doing this after you have a couple deals under your belt.

@Sam Fickel . I've done both for 21 years and I agree - I would invest in a syndication. If you do decide to do a flip, I would visit your local REIA (real estate investor association) and look for someone there.

If you partner with someone, I would set up a formula to pay you (say) 1% interest monthly and pay him (say) $20/hour worked.  Then after paying those two costs out of profits, split the rest.  That’s what we did for years and never had a dispute.  Happy Investing!  

@Sam Fickel I've done this in the past.....I did all of the research, all of the management, construction work, etc... Everything. He provided the money. 

But he had money. If you want someone like me, you'll need disrespect, but what you have to offer is not nearly enough. And you need cash so I can go do a deal whenever I want.....

Don't give only point was to get realistic about this. If you want 'that guy' you will need to be the 'money guy'. Your title says 'all the work'. That's a lot to ask. So you'd better be prepared....

You can find someone in time I think, maybe a younger guy......?

@Bruce Woodruff yes, I actually have a meeting on Tuesday with a guy I've been talking to about a partnership. The idea is for me to provide the down payment on the hard money loan, and then we'll split profits 70/30. He should only need me for a few deals before he can fund his own down payment, but the experience will be well worth it