House Flipping Group

[Cole Palmer]

Looking to invest with a "group" who flips houses for a short term return. Any recommendations? (Investing less than 100k) Has anyone had success with this?

[Mike G.]

Originally posted by J Scott:

If loaning the money, make sure you get first lien position on the property, make sure the loan is for less than 70% of the after repair value of the property

In my opinion, it's reasonable to expect first lien position if you are contributing at least 50% of the total costs, otherwise I think a 2nd lien position is appropriate.

Also, if you are taking a debt position only, be aware of the usury laws in the state where you are lending, and make sure you are not violating those laws by "charging" more interest than is legally allowed. In California, I believe the limit is currently 10% unless the loan is handled through a broker.