I need advice with an exit strategy

[Alex Martinez]

Good afternoon, I need advice with an exit strategy. I have a partner/investor that is looking for a minimum of 10k return on a Flip that we just purchased and completed the rehab. Investor is willing to continue using his money and giving me a 50% split, however, he is wanting a minimum profit of 10k immediately upon sale.

Please see details:

Purchase Price 55k (Cash Purchase)

ARV 119k

After Rehab/holding & purchase closing cost $92416

I would also have to include 2% for sale closing cost and 6% for Realtor fees

In what scenario can I obtain a more favorable return?

• A.Sell for 118k – Listing through MLS/Broker ( I would split approx. 17k with the seller)
• (I would have to wait until we find a buyer, incur broker and additional closing cost)

• B.Sell for 120k – Owner financed. Ask for a 10% down payment and possible charge a higher rate 7.5% to the buyer.
• I would have to refinance into an investment loan with a local bank who is offering 75% ARV at a 6.5% on a 25yr amortization that will turn into an adjustable rate after 6 years.
• I would be able to give the seller his investment of 80k, pay the investor 10k profit.
• However,
• I would only be able to recoup my 10k invested towards rehab. I would not have upfront cash because of the max 75% LTV on the refinance. If we used this scenario, the investor would no longer be involved with the seller financing, and I would slowly see my return. Am I yielding a higher return by seller financing?

Am I looking at these scenarios correctly? I need some advice, Please.