@Lee Lockhart Were you planning on rehabbing the houses anyways? Giving up 50% of the equity doesn't make sense to me if you can get a HML, private money, or even traditional financing to rehab the houses, pay off the interest, and retain 100% of the equity. If you own the house's free and clear, you could get a HML for 100% of the rehab costs, pay about 10-12% interest, and keep all of the profits. Do the math.
For what he's offering, it might make sense for him to put up the rehab money, and split 50% of the profits upon selling. I had a similar deal with a construction guy, it saved a bunch of the hassle involved in HML, but in the end of the day, I made less money.
Thanks Yonah. I really appreciate your response. What you said. makes sense.
I vote to keep the house 100% for yourself if you can do the rehab on your own ( as far as cost goes).
Maybe if he wants to help you buy future projects then you can partner up.
Sounds fishy to me.
Just get a hard money loan, do the rehab and then refinance into either conventional loan if you qualify or a mid tier no income verification product if you don't. If you're credit challenged, sell the properties and clean up your credit and then start all over again.
Hope that helps,
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