I am interested in doing my first flip, but don't want to do it on my own on the first try. For those of you who are Pro flippers, would you ever partner with a new investor? If so, what would the terms have to be for the partnership?
I have the funding I need to do a flip, I just don't have the expertise.
Rental Property Investor · Logan, UT · Member since 2017 · 47 posts · 19 votes
6y
@Aiesha Hooper
Smart to want to partner with an experienced investor!
One way that an experienced investor would want to partner with you is if you found a deal and brought it to them.
The terms of the deal vary but for me when I partnered for my first deal, I structured it so that my partner would receive a great return (almost all the profit) and if we hit that then I would get a little profit at the end, but my goal was to do it for the benefit of educating myself. And I also didn't bring any money to the table, so your situation could be different.
Rental Property Investor · Doylestown, PA · Member since 2008 · 1k+ posts · 1k+ votes
6y
@Aiesha Hooper - If you're able to bring funding that would definitely be beneficial. One thing a lot of pro flippers are in need of is capital. They often have their money tied up in one or more deals. When those deals sell they are flush with cash but then they put it into another one or two or three and then they are tight again. I've partnered with several new investors that have approached me that had money but limited or zero experience. Just in the past year and half I partnered with a new investor on a $4.2M commercial building and another investor on a $3M office building. They're so happy with how it worked out they both asked if I could find other deals to invest in. Recently one of them wanted to invest in a $15M development deal that I would oversee. I didn't have to bring any money to the table but after doing my due diligence I convinced him it was too risky and that I could find something much more predictable, manageable and with just as good of a return... so now I am on the hunt :) So make sure you partner with someone that is not just looking for a money grab.
@Salvatore Lentini Thank you for that explanation. That was very helpful! If I am not partnering with someone who is "just looking for a money grab", what type of partner should I look for? To my understanding you were saying money is the incentive for pro's. Also, what do you consider a respectable percentage to offer a pro flipper for partnership if you were funding the project vs if you were going 50/50 on a project?