Okay guys I have never done a rehab a wholesale, or anything of the sort. Fortunately my father owns rental properties - both commercial and residential, my sister is a real estate agent, and I have been studying the art of wholesaleing, flipping, and general real estate for months now so I do understand the generalities of it.
My question is this:
I posted an ad on craigslist looking for a mentor/ investor. Someone who would invest with me (using the decent stack of cash I do have) and teach me, in exchange for a percent of my profits.
Today, immediately the morning after posting the ad I received a phone call from a man that owns a wholesale, rehab, and brokerage in my hometown. (one of those 1-800-webuyhouses things)
Being as I am a Marine he seemed fond of working with me since he was an Army vet. or maybe he just wants to make money... anyways.
He wants 5k cash up front and 5.5% listing fee. He told me to get approved through a hard money lender (RED DIRT LENDING) which I've already done. They want 14.5% 4 points, 6 months only, and I need to register a business name. I am now already approved with them.
In return for my 5k cash and 5.5% listing fee, he apparently will let me rehab the homes he finds (which according to him have solid profit margins after repairs). I am waiting for a phone call from him tomorrow in which I will either get a property with 50k+ profits or his other 80k+ profits.
So basically I am paying him 5k cash and the 5.5 percent to find the home, let me buy and rehab, then he markets it online. Is this a good deal or is he just generally attempting to make big profits off of me.
Please, I need your opinions. This is my first flip in houses, I don't want to lose and I want to make the right moves. On the first two cars I ever bought and sold I lost 15k cash, after that I have a 41% ROI but I would like to not make the mistakes I made with cars, on houses.