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Updated about 7 years ago on . Most recent reply

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Ali Ahmed
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Is it a good idea to invest ........

Ali Ahmed
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Is it a good idea to invest 20000 dollars for 10% equity with a real estate wholesaler in the Dallas Texas area? What is the market outlook for the Dallas market? Is it a good market? What other questions should I ask him?

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Josh Caldwell
  • Investor
  • Dallas TX, United States
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Josh Caldwell
  • Investor
  • Dallas TX, United States
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The answer to that question depends on a few things.  First off, what is your skill set.  If you skills in real estate are limited, then yes, this is a great way to make money passively, assuming that you wholesaler is both skilled and honest.  You want to investigate his track record and understand what he wants to do with that money. The first red flag is that 20k is a small amount and the uses are pretty limited in a big market like Dallas.  

If your skill set is fairly well developed, and you understand creative finance, then making 10% is a terrible return.  with that being said, you might still want to get involved in private lending because it is 100% passive. Someone else, someone with experience and skill does all of the work for you and then gives you money.  That is a pretty sweet deal if your skill or your time is limited. 

You need to be a bit careful here.  Your money needs to be secured by a note against the property, that note had better be prepared by a lawyer in the state where the target property is and it had better be recorded. If any of those conditions are not met, then you are likely to get ripped off.  The good news is that if this guy is not protecting your money properly, there are always professional real estate investors who will work with you.  You just need to ask. Most of us will pay 10% on your money. It is just a matter of talking to someone and building trust in them.

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