Need funder - What if we split profits?

Question

I am in a unique situation. Lenders are scare to give 100% because I have only done flip and hold at smaller amounts. I want bigger time with big results. Purchase $430K - Rehab $200K. Lake front home to sell at $1,000,000 to 1,200,000. Instead of a percentage to finance...what if it was a partnership and I ran the deal and split like 70/30? Not sure if anyone has ideas on who to look up for this. Let me know thoughts.

Brian Fung · Answer

Aloha Duane,

Do you have access to any private lenders? Instead of asking for a full 100% from a partner, just raise money from private lenders to cover the down payment and make sure you work with a hard money lender that allows you to get your down payment from somewhere other than your own bank account. A lot of people stifle their growth by using private lenders to fund 100% of the deal. Instead, a better way to scale is to take that same money, and split it over 3-4 down payments to then be in a position to do 3-4 deals. At that point, money is not your problem. Sourcing deals and bandwidth (managing multiple projects) becomes your problem. This is where you want to be and where experienced investors are.

I hope this helps! Aloha.

Shawn Parsh · Answer

Duane,

I personally do not like to finance an entire deal, for that matter I like to have a very low debt ratio. I know you can buy properties faster by leveraging money from others, but I think it increases the risk. I know others will likely beat me up over the way I do things, but for me if you have experience buying and rehabbing properties then I would do that to generate the money you need to do bigger deals.

Maybe you fix and flip a couple to generate the cash you need or cash out refinance from the properties you hold. I would still encourage you to keep your debt level low even when using a cash out refinance. I know a lot of people have been successful using a lot of debt to build their portfolio it's just not the way I do things. Everyone has to decide their own path. Good luck.

Marc Greger · Answer

sure I reached out to you directly

Duane A. Snow · Answer

Hi Marc,

I would love to discuss with you.

Duane

Marc Greger · Answer

Hi Duane, we actually have a solution for that. (but investor and deal need to qualify)I don't like the term 100% financing since there is a lot of scam going on and that term is somehow pre-loaded. Besides form being a broker I´m also private money lender and do gap funding. I´m happy to discuss in detail

Darmon Dotson · Answer

Duane,

If you have someone willing to fund 100% of the purchase price then you can seek out a 2nd position lender to fund the rehab portion. I myself have lent in 2nd position and help bring 2nd position lenders to deals such as this.

Duane A. Snow · Answer

yes

Duane A. Snow · Answer

Yes it is rural.

Duane A. Snow · Answer

Yes it is. Right on the lake too. Great dock space and views.

Scott Wolf · Answer

I may be able to assist.  Is the property rural?

Need funder - What if we split profits?

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