Equity Partnership For This Deal

5 Replies

I am a wholesaler. I would also like to start to flip properties as well. If I were to partner with someone who I have in mind (not on the forums here or advertising for a partner here) what would a deal look like if I the wholesaler found the deal and the partner funds the deal and rehabs the property. If we both split the profit and split the costs of the money, would a 50/50 split be reasonable? Would I as the deal provider need to put some sweet equity in to even things out or help manage the project? What do you all think? I would only be providing the deal and not financing it.

@Trevor Schuler if all your doing is finding the deal then 50/50 would not be a reasonable ask. If you find the deal and handle the rehab then 50/50 makes a little more sense.

Depending on the overall profitability It may be better for you to wholesale if you look at ROI over time and you have no risk. You get your fee upfront. Rehabs can be tough and you can lose money quick.

If you’re good at finding deals You should focus on scaling that until you have your own funds to flip.

@Greg Dickerson thanks for the help. In my mind I could validate either way for a 50-50 split being that having money and the expertise you still don't have a deal so by me providing a deal that could be as equally beneficial. I also think too that waiting until I have the funds would also be a great idea. I would be doing this more so to learn from someone who has success flipping to add to my tool belt.

I think the best way to gauge a deal is to turn it around. If the partner found the deal and you did the rest, would 50% be fair? I really think it would depend on how hard it is to find a deal in your market and how much work it needs. Good luck!

its tough to get started..  if you really want to do this its more important to get your first few in the can so you can prove track record right now your just talking.. 

so to get that first investor / Money person on  board you need to skew things to the money side of the equation for folks with money that partner on real estate .. deals are dime a dozen I get pitched more than I can handle every week from experienced folks.. 

Not saying you have to do it for free but make it so sweet for the money that it actually happens.. I see more folks that have no funding but think they bring the value .. when in fact its simply not the case.. 

I have seen in my 5 years on BP thread after thread on this site about those with no funding but have deals and think one they should get an even split to a majority of the return.. just not reality and they end up never doing anything.  Totally unrealistic expectations and their opinion of what they are worth or bring to the table is far inflated. 

Originally posted by @Jennifer Rysdam :

I think the best way to gauge a deal is to turn it around. If the partner found the deal and you did the rest, would 50% be fair? I really think it would depend on how hard it is to find a deal in your market and how much work it needs. Good luck!

That does change things a bit when you look at it that way. Thank you for the insight.

 

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