How to partner on buy and hold?

Question

Greetings! New investor here.

My competitive advantage is that I have some capital and am motivated to market/hustle for leads. I am interested in buy and hold investing with BRRRR. I'm missing the project management/contractor skills and experience. I am attracted to having a knowledgeable partner do the project management side of the rehab. I want to avoid paying hourly wages for a project manager, seems like a partner is much more likely to work well. Seems like it is much easier to partner with flipping than long-term buy and hold, since you have quick (hopefully!) sell date and can split the profits.

Anyone out there have experience/ideas to share related to this? Anyone used an appraisal to determine property value and splitting profits? Thanks!

Jean-francois Ndomb · Answer

@Jeff Macdonald It is very recommended to start educating yourself on General construction basics to start and eventually cut off the Project Manager when you have a strong grip and experience on how to deal with contractors and manage your own projects. I was a full time professional Assistant project manager in my last job and i am sure with experience and persistence you will get to that stage. And again, even when staying on the financial side of things, I'd want to be aware of what is going on with my investments. Best of luck in finding a partner, good ones are hard to find, especially the hard working ones.

JF

Jacob Sampson · Answer

Possibly a different angle from which to view your problem.  The hourly rate of using a PM/contractor is probably significantly cheaper than giving away 25%-50% of all cash flow, equity, depreciation, and principle buy down.  Neither my partner or I bring any value to the table except for money and we have discussed partnering with someone who has the skills you want but it's tough to justify, in our minds, why giving away 33% of everything is cheaper than sporadic hourly rates.

Alex Franks · Answer

What ever you decide . Have a lawyer draw up contract. Make sure things are detailed out on who is  bringing what to the deal. I want all expectations spelled out. Also add in their a exit strategies if you need to get out.   Partner ships work as long as every one knows their roles, and what they are bringing to the table.

Alex

David McBrayer · Answer

If you are ever looking in the Winter Haven, FL, area let me know.  I am investing in that area and might like to team up with someone with capital.  I own a few long term rentals.

The prices are not that expensive for what you get.  I find 2-2's concrete block 100 sq ft condo's with washer and dryer hookups inside in the $40k range.  $230 a month HOA and the place is well maintained and ran well.  There is also a little pool out by the private lake and close to Polk State College. They bring in $800 a month.  The upstairs ones maybe $750.  I get $800 for my units but they are bottom floor units.  They don't require much rehabbing.  I have people for that and I use a property management company.  As I am disabled now.  I can get around but not like I use to.

I hope you find some good deals.  Hit me up if you are ever looking in my area?

Thanks,

David McBrayer

McBrayer Investment Trust

David McBrayer · Answer

Sorry, that is 1100 sq ft. condo's.

Jeff Macdonald · Answer

@Jo-Ann Lapin To get my feet wet, I want to start with SFHs in my home area (near Chico, Calif.) and start with minor rehab---so, a shorter hold period.

Jo-Ann Lapin · Answer

Jeff. Many good questions. What exactly are trying to home in on? What area price range hold period etc?

Jeff Macdonald · Answer

In my area. Chico/Oroville/Paradise area in California (Butte County).

Lee Scarlett · Answer

Welcome to Bigger Pockets!  Are you planning to invest in your area or other places?

@Jeff Macdonald

Jacob Sampson · Answer

I think that's a reasonable concern.  You will probably have to spend some time developing some relationships.  I would be surprised if there wasn't someone on BP, in your area, that has the skill sets you need and they are just looking for someone with the cash necessary to get started.  Finding capitol seems like the most difficult part of the equation for a beginner.

How to partner on buy and hold?

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