Advice Needed: 20-Year-Old Investor Planning First Flip with a Silent Partner

Rehabbing & House Flipping
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Advice Needed: 20-Year-Old Investor Planning First Flip with a Silent Partner

Garry Lawrence
Member since 2024 · 7 posts · 6 votes

Hi Everyone,

My name is Garry, I’m 20 years old and based in Baltimore, MD. Almost a year ago, I bought my first property, which is currently a long-term rental. It’s been a great learning experience managing it, and now I’m preparing to do my first flip, God willing, within the next 3–4 months.

I have a close friend who’s also an investor in my e-commerce business, and he’s expressed multiple times that he wants to invest in my next real estate project. He’s willing to invest $35,000 and possibly more as a silent investor, while I’ll handle everything from acquisition to renovation and resale. In return, I’d give him a percentage of the profit once the flip sells.

Since this would be my first flip, I want to make sure I structure everything properly and minimize risk for both of us. I currently have around $5,000 in savings and about $16,000 in stocks (which I’d rather not touch unless absolutely necessary). I also have an LLC for my real estate business and am wondering if I should buy the flip under my name or through the LLC. I'm young and still new to this so I really appreciate any advice, especially since I've never done a flip before.

What I’m Looking for Advice On:

  1. Partnership & Profit Split:
    What percentage of profit would be fair to give my silent investor for putting up $35k? Should I structure him as a lender with a fixed return or as a partner sharing in profits?

  2. Funding & Structure:
    What’s the best way to secure additional funding beyond my partner’s $35k, like hard money, or private money? and should I use his funds primarily as a down payment or for rehab capital?

  3. Finding & Analyzing the Right Property:
    What type of property should I be looking for around Baltimore, or where are good places to find flip opportunities that make sense for a beginner? (I'm open to buying outside of Baltimore)

  4. Executing the Flip Successfully:
    What’s the best way to go about completing a flip,  especially for someone doing their first one? Do you think it's smarter for me to hire a general contractor or manage subcontractors directly?

  5. Contractors & Renovations:
    How do you find reliable contractors who don’t overcharge new investors, and what are some common rookie mistakes to avoid during the rehab process?

  6. Ownership, Risk & Protection:
    Since I already have an LLC, should I buy the property under my name or through my LLC? What are the key things I should make sure of or consider before doing this flip to protect both myself and my investor?

  7. Scaling & Long-Term Growth:
    What advice would you give a young investor trying to scale responsibly, including systems, habits, or routines that helped you grow early on?

I’d truly appreciate any feedback, insight, or personal experience you’re willing to share. Thank you to everyone who takes the time to read and respond, your advice means a lot! God bless

– Garry L.

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Jordan Outen
Member since 2025 · 18 posts · 6 votes
11mo
Look and see if there are grants in your area. Most places will lend you money to help with renovations since you are helping preserve property values
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  • Jordan Outen
    Member since 2025 · 18 posts · 6 votes
    11mo
    Look and see if there are grants in your area. Most places will lend you money to help with renovations since you are helping preserve property values
    1Reply
  • Peter MckernanBusiness Member
    Residential Real Estate Agent · Irvine, CA · Member since 2013 · 2k+ posts · 1k+ votes
    11mo

    I would talk with an attorney for this type of partnership. People always use this as a last resort but really should be a first step to partnering. There are so many things that go wrong with partnering when you least expect it that a solid Operating agreement is of the upmost importance. The reason is when you are partnering with people just like a marriage, there are things that come up over the time the relationship that are hard to get over without consulting the other partner. 


    For example, hey partner we were going to sell for X and now we need to sell for Y (lower than expected), are you good if we drop the price? The partner says no, and then the holding costs build to a point where the profit would have been greater if you dropped the price an sold when you brought it up verse holding out for that number you wanted. Which if that partner has the ability to dictate that stuff, you are on hold until they get on board or they realize when it is too late. This is just one example of many.. 

    Other issues can be contractor needs to be fired but that partner likes the contractor because it is his brother-in-law, or they want to be more involved or less involved and the split is not good where you want to be.. Or the partner (just had a client tell me this) that was overbearing and his ego got too big where he just needed to stop doing deals with the partner because it was hurting other relationships with their contract and an attorney. 

    There are so many things that come up.. So reach out to an attorney and get some advice when partnering. 

    The McKernan Group4.957 Reviews
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  • Doug Clark
    Lender · Member since 2025 · 41 posts · 13 votes
    11mo

    Solid start, Garry 👏

    For funding, you can use hard money for the purchase and rehab, and then use your partner’s $35K for the down payment and closing costs. Just make sure you set up a contract so everything’s clear whether it’s a 60/40 split or whatever you both agree on. If you’re getting a loan, it’s best to do it under your LLC for protection.

    When it comes to contractors, get 2–3 bids to compare pricing and timelines. The cheapest isn’t always the best make sure they communicate well and understand your vision. Lay out the budget and timeline clearly, and stay on top of the work to keep things running smoothly.

    For finding properties, look into zip codes with active investor activity and use recent comps nearby to confirm your ARV before buying. Having backups and reserves for unexpected issues will save you from stress later on.

    Real estate is all about learning through experience — you just get better with every deal. Keep going and stay consistent

    1Reply
  • Elealeh Fulmaran
    Specialist · Member since 2025 · 483 posts · 270 votes
    10mo

    Garry, keep it simple and protect the friendship: structure your friend as a lender with a clear promissory note, lien, and fixed return, not an equity partner; use his funds for down payment and/or rehab gap alongside hard money, and only on a deal where your ARV, rehab, holding costs, and resale timeline leave conservative profit. For a first flip, target light-to-mid rehabs in C to B areas with multiple comps and days-on-market under your hold period; build a tight scope and hire a GC you've vetted with references, pay by milestones, and keep a contingency. Buy in your LLC if your lender requires it, otherwise don't overcomplicate, just carry strong insurance and a written JV or note. Your next step: define your buy box, line up a hard money term sheet and your friend's note terms, then underwrite three candidate properties and only proceed if the numbers work with a margin even after surprises.

    1Reply
  • Jules Aton
    MD/DC · Member since 2024 · 1k+ posts · 1k+ votes
    10mo

    Congratulations on first and now upcoming second property! What neighborhood are you operating in? Baltimore still has a decent selection of solid neighborhoods at fairly reasonable prices, all things considered lol. 

    0Reply
  • Scott Chilton
    Real Estate Broker · Belmont, MA · Member since 2025 · 150 posts · 65 votes
    10mo

    Garry, you’re in a great spot. Starting young, already managing a rental, and thinking carefully about structure and protection before diving into your first flip. That mindset alone will save you from a lot of beginner mistakes.

    For your partnership, clarity is everything. Since your friend will be a silent investor, it’s usually cleaner to treat his $35k as a loan with a fixed return instead of a profit split. This keeps expectations simple and avoids messy profit calculations later. You can offer him a fair interest rate or flat return that still leaves enough margin for you. If you decide to do a profit share instead, make sure everything is in writing with clear roles and timelines so neither of you feels uncertain midway through the project.

    For funding, pairing his capital with a hard money or private lender can work well. His funds can cover the down payment and closing costs while the loan covers the purchase and rehab. Just make sure the deal’s numbers leave enough room for both the lender’s fees and your investor’s return, a tight margin can turn a win into a loss fast.

    As for the property, look for cosmetic flips where the work is mostly surface-level (kitchens, bathrooms, paint, flooring). Avoid major structural issues or foundation work for your first project. In Baltimore, older homes can surprise you with hidden costs, so overestimate your rehab budget and timeline.

    On renovations, if this is your first flip, hiring a general contractor might be worth it, even if it costs more. You’ll learn the process without juggling trades yourself, and it helps you see how experienced people manage timelines and budgets. Once you’ve gone through a full project, you’ll know enough to decide if you want to handle subs directly next time.

    Regarding ownership, using your LLC can be a good idea since it separates your personal assets from your business activities, but check with your lender first. Some hard money lenders prefer lending to individuals. The key is to get legal and accounting advice before closing. A short consultation can save you big later.

    Finally, to grow long term, treat this first flip like a classroom. Document every step (your costs, timeline, challenges, and wins). Build strong relationships with lenders, agents, and contractors. The habits you build on this deal will set the foundation for everything that follows.

    You’re doing all the right things by asking these questions before jumping in. With good planning, a clear agreement, and realistic numbers, this first flip could become the blueprint for a great investing career.

    1Reply
  • Mike Klarman
    Specialist · NJ · Member since 2022 · 1k+ posts · 652 votes
    10mo

    1. you need to sit with your partner and discuss contributions and equity desires and then you have to agree.  For sure if one side is all of the money they will want 50% at least.

    2. So, the loan product used most is the bridge loan.  It has a component for the purchase and a component for the rehab.  It is usually a 12 month loan with interest only payments.  Now, you are in a messed up market.  Baltimore is going through one of the biggest appraisal scams on record.  People are going to wind up going to jail and most lenders are steering clear of the market.  So, I'd say for a young newbie with bare enough money in that market, right now the chances of being funded are very slim.  That's my opinion based off what I've seen and heard.

    3. This is a science/skill.  It's not honed overnight.  I coordinated 40+ deals for people, a deal that looks good on paper does not mean it will translate to real world results.  All my clients were in deals that made great sense on paper.  But the paper assumes the best possible outcome, what happens when it is not the best possible outcome (almost all the time it is not)?  Flipping, by no means, is no sure thing.  The short term investment instruments are always have the highest return, but they are the riskiest as well.  Your partner has a good a chance of losing the 35k as he does making any money at all.  That's just the risks.  Holding costs build up.  Problems in the house arise.  Work needs to be redone cause it was not done right.  You find hidden problems.  The market shifts.  Interest rates rise.  If any of these x factors become a problem you're gonna wish you never did the flip in the first place.

    4. Here's the key components to a successful exit, first the property has to be right. The margin has to be in there and the budget plus rehab remains under 70% of the ARV. The house needs to be in the right location. Not on a highway, not a ton of stairs leading to the front door, not a house that takes on water when it rains, you need the right house. Then the house needs to be in the right zip code. A house can be worth x in one zip code and y in another. You need an up and coming area. Once the asset checks all boxes, you need people to do the work. Do the work on time, with quality, urgency, transparency, and responsibility. This is where the process breaks. I went through 9 contractors in a total of 25 flip projects over the course of 2 years. Jobs lasted longer, cost more, lingered on and on and on, holding costs built up. Money out of pocket rose. Profit vanished like sand in the wind. What I am doing in RE now with my clients is much safer, much faster, offers as good or better return, and they never lift a hammer or take on debt.

    5. How?  Through trial and error.  You don't know how someone does business until you do business with them.  I've had to stand for contractors who made me look soooo bad.  I learned my lesson.  You have to understand the contracting game.  They take on a job and get a deposit.  They are supposed to use said deposit to start the job.  After burning through the deposit, they are supposed to work of the lender draws and then you get the deposit back at the end of the job.  But what happens is, all these GCs have failed jobs going on.  Jobs that are bankrupt and need money and some of your money will go to their problems cause they say they'll just take on new deposits and replace your money later.  You see what happens?  It's soon a Ponzi scheme.  And if the GC perceives you as weak, being a 20 yr old young man, you're the guy he won't be afraid to screw over cause you won't get no lawyer to try to recoup 10k, 15k, or even 20k.  It takes too long and costs too much.

    6. If you want a chance at financing do it through your LLC. But beware. Financing can get you more problems than it's supposed to solve. Remember, agents and wholesalers are trying to sell properties. They will always show you the highest comps and tell you the market is moving. Always.

    7. You're young.  It's great you are thinking about these things.  RE can provide the financial freedom you desire.  The traditional fix n flip approach is dangerous for the many reasons I laid out above.  I'd go and get my RE license if I were you.  That will help you in analysis as well as make you look stronger to lenders.  Do not worry about scaling.  It will make you trip and fall.  Worry about getting the first one right, cause by my count if you lose on that one you are out of the game and you are a giant underdog in Baltimore to be successful to start with.  Scaling comes in, once you have a few certain processes figured out and a few solid team members you can count on.  You get 3 - 5 done and refine the process and see that the project time has gone from 9 months to 6 months to 5 months and now things are working and now you think about scaling or take your blue print to a new market, but like I said in Baltimore you are behind the 8 ball to start.

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