I hope this is the write forum for this.
Who has experience raising funds for deals? I'm currently tied up in a fix and flip that I'm doing with a partner. However, there are several properties out there I would love to move on. I figure, why not find another partner who could come in with the cash. They become the equity partner, I manage the flip, and we split the profit. I've already done this with a company, but would love to find an individual and have no money down of my own (since it is tied up in other projects at this time.)
I am actually doing this with my current deal, but reversed: I'm funding the entire deal while my partner is managing the rehab itself. We will then split the profits afterwards.
In your experience, how would you go about asking for partners? Is that something you can legally put on the the forums, or would that run afoul of the SEC (I know syndications have to be careful because of this, and I don't want to run into those legal troubles!)
@Robert Freeborn I did this exact setup on my first (and probably only) flip last year in Berwyn. My partner put up all the capital, and I put up the time to find, renovate and list the flip. We split the profits 70/30, with him taking the lion share of the profit for bringing the cash. To be honest, we did it all on a hand shake, which works well if you trust the other person, but is probably not recommended. It all worked out, and everyone got paid in the end.
@Robert Freeborn Two suggestions. 1. Review how you got involved in your first transaction - determine if the model is repeatable with the rolls reversed. 2. Consult a corporate attorney who is familiar with the SEC guidelines so you have the correct documents and procedures.
@Robert Freeborn , I don't know the legalities of asking for partners in the forums, but I do know the BiggerPockets rules prohibit this sort of request in the regular forums. You could post it in the Marketplace Forum since you've got a Pro account.
Depends on how much experience you have. If you have a few fix-and-flips under your belt, raising money should be an issue since you have a proven track record. To find private capital, I would start with your personal network. Mention that you have fix-and-flipped X deals in the past with an average return of X%. Say, "if I find another deal like this, would you be interested in investing?"