Plenty of opportunities just need to find more partners....

Plenty of opportunities just need to find more partners....

Investor · Salisbury, MD · Member since 2015 · 31 posts · 17 votes

I'm located in Salisbury, Md on the eastern shore of MD, and have been flipping homes for the past 3 years. Currently me and my business partner are doing one house at a time trying to get enough going so that we can have multiple properties going at once. Often in many areas I notice that people can't find good deals or the market is flooded, here it is opposite there are many deals and low cost of living allows for lower upfront cost and risk. We have done very well for ourselves in our properties but want to take it to the next level. I wanted people's input on what to offer potential investors when I approach them, as I have two meetings lined up for next week. 

Should I be approaching them as offering a profit share or what about offering a guaranteed ROI percentage? One advantage is I always have a property of my own underway so there are multiple fallbacks and advantages to being able to pay people back before the property they invested in even sells as I could use the profit from my other flips when they sold.

Most properties that I'm looking at are in the 35-75k purchase range and ARV values of around 110-150, with average Reno cost of around 20-30k with most projects taking 90 days also since there are a lot of FHA loans on these properties it really doesn't benefit to flip it any faster.

The are does have a few flippers but most are very low quality and do not have the construction network that me and my business partner have from being in the field for years so there Reno cost is so much higher then ours we can sell cheaper and better quality, as our last 2 houses were both under contract in less then 10 days where theirs sit on the market for months. 

Any input anyone can give me I would appreciate, I know I'm in a small market but to me it's an advantage to help me find other investors as the buy in cost is so low compared to many areas. 

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  • Investor · Salisbury, MD · Member since 2015 · 31 posts · 17 votes
    10y

    also I meant to note that my wife got her Maryland realtors license this past year so we are able to roll that commission into our profits. 

  • Real Estate Broker · Bowie, MD · Member since 2014 · 242 posts · 44 votes
    10y

    Wow, seems you are doing well! I'm no where close to where you are, but I've done the opposite: sat with investors first, then sought out the market. I think it may be in your best interest to learn what they want: do they want their return based on debt, equity, mezzanine (the gap between loan and cost, but also a piece of equity possibly)? There are so many different expectations, so I think it's best to ask what they are looking for, and find a solution that works best for all parties involved.

    In any case, I'd love to learn from you, since you are relatively close to where I'm at in Maryland. You've seemed to learn how to maximize profits, so I'd love to hear how to came to where you are today.

  • Real Estate Agent · Baltimore, MD · Member since 2014 · 215 posts · 123 votes
    10y

    @Keith White I'm trying to do the same thing in the western shore. I think the best route is to offer a loan guarenteed by the property at a certain interest rate and for a certain time. makes it a lot cleaner than going 50/50 with a certain profit expectation and then come below that profit. I understand the same could happen with a private loan but on the flip side, I also don't want to be giving away more than I have to if I am the one doing all the work.

  • Investor · Salisbury, MD · Member since 2015 · 31 posts · 17 votes
    10y
    Originally posted by @Stephanie Dobbs:

    Wow, seems you are doing well! I'm no where close to where you are, but I've done the opposite: sat with investors first, then sought out the market. I think it may be in your best interest to learn what they want: do they want their return based on debt, equity, mezzanine (the gap between loan and cost, but also a piece of equity possibly)? There are so many different expectations, so I think it's best to ask what they are looking for, and find a solution that works best for all parties involved.

    In any case, I'd love to learn from you, since you are relatively close to where I'm at in Maryland. You've seemed to learn how to maximize profits, so I'd love to hear how to came to where you are today.

     Thank you Stephanie, yea so far things have been going well for us. We have yet to use any outside money other then cash we generated on our own. We were lucky enough to have been in the construction field for years and experienced in every field in home construction to begin with. We started off by doing side jobs on weekends and nights and saving up our money, eventially we worked a deal to do a flip for a guy for a percentage of the profit and just went from there. Feel free to send me a message anytime I would be more then happy to share what I have learned over the past few years

  • Investor · Salisbury, MD · Member since 2015 · 31 posts · 17 votes
    10y
    Originally posted by @Gabriel G.:

    @Keith White I'm trying to do the same thing in the western shore. I think the best route is to offer a loan guarenteed by the property at a certain interest rate and for a certain time. makes it a lot cleaner than going 50/50 with a certain profit expectation and then come below that profit. I understand the same could happen with a private loan but on the flip side, I also don't want to be giving away more than I have to if I am the one doing all the work.

    Hey Gabriel, I agree with you I would feel more comfortable with a set interest rate to begin with as like you said there is no letdown if the price ends up dropping or Reno cost more then anticipated. What area are you currently working in? Also what type of ROI do you look for in your area?

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