I am an out of town investor for the Cincinnati - Dayton Ohio area. I have some money to invest and I am looking to do Virtual Flipping. I am from this area and familiar with it, plus I have some friends & family local.
I am seeking advice on the steps that I should take when seeking a partner....
- what should I check on anyone that I deal with?
- what things do you check when dealing with someone else?
- once I find someone to partner with, what docs need to be in place to protect all parties involved?
- what type of split or interest rate do you receive if you lend $$$ & if you do a JV deal?
Virtual flipping has additional challenges. Assessing the property from a distance is virtually impossible. A contractor, inspector or someone else can look at it take pics, and give their assessment, but it's never the same as being YOUR assesment.
Getting accurate info from sellers is a big frustration for me, whether it's a homeowner, wholesaler or otherwise.
if you JV with someone, you share the profit or even loss on the project. The rato is what you negotiate. Experience level, daily oversight, financial contributions are all factors. A bad JV can be hard to resolve.
As a lender, obviously, you are first to get paid, and in the worst case scenario, you can foreclose.
Yes, you should check on anyone you deal with. Most importantly, you need to know what they do when things don't go as planned.
The docs will vary with the type of agreemnt, but they must very clearly spell out the roles and responsibilities of each party.
@Darrin Carey , as always thanks for the info.
I know that virtual flipping presents a new set of complications vs virtual wholesaling or renting. I want to ensure I understand most aspects of it or more before I actually try it. I have been wanting to get into it but i want to do it the right way.
Anyone got an example or template of a JV deal they want to share?
Anyone have an example of the paperwork for serving as the Private Lender?
As a private lender, a simple mortgage and note covers the basics. I think my title co has a template they use.
A JV agreement needs to be very customized. HIGHLY recommend professional assistance.
I think have some generic templates around somewhere, I'll look for them.
On the plus side, I'd you work with someone who is experienced, they will often have most of the paperwork.
Of course, for the paranoid crowd, there are lots of ways to make things more complicated.
@Bryan C. Where are you currently located? I see the APO address.
Near London England.
Have you done any traditional flips?
The trick is to find an honest contractor or project manager. assessment can be easy tho, hire 3 separate inspectors, costly but you need to secure that investment. three bids for contractors also needs to be in place. i have done some consultancy work for a commercial company as construction manager for renovating their 3 properties while they are searching for hired physical project manager. not that easy, not that hard.
Hi Bryan, not sure if this will help, but I did my first rehab in San Antonio from Virginia, which is what got the ball rolling for us to move down here. Here's a little writeup on that experience, some of the many many mistakes I made, and hopefully how folks can avoid some of the same mistakes. Hope this helps.
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