Partnering with end buyer on a Las Vegas Duplex
Hey BP community. I want to try something new (well at least new to me). I want to pre-sale or partner with someone to flip a duplex 2/1. Here are my thoughts and numbers. Would love some feedback of my super smart folks out there.
I just picked up a single family zoned R2 that I've confirmed with the city can make a duplex. It's located downtown in the City of Las Vegas (which MIGHT be able to be made into a vacation rental, more research is required). The area is a little run down but beginning to turn. I'd say it'll still be a few years before it gets there but I've seen a lot more activity lately. So this is what I was thinking. I could get a hard money loan and go through the regular process but I am thinking if I can get a buy and hold partner we can both save/make more money. Here are my numbers:
$82k PP and CC
$60k renovation (fully permitted)
$3k holding and misc
$145k all in
$200k ARV
Rents range from $650-850 (of course I think for a brand new unit we'd command the highest rent)
$55 gross profit
So if I went traditional I'd spend another 13k in closing and agent fees.
When our investors fund the entire deal we share 50% of profits so why not find the end buy and hold partner in the beginning and give them that 50% discount on the property. The property would be in their name and the buy and hold investor would be all in $172,500 for a brand new duplex in one of the hottest markets in the country. I also have my property management permit so I would find and place a tenant in there as well as part of the deal and could manage it for them as well. Well anyway thats my idea.
What do you think? If you're a buy and hold investor would you do this deal? Why or why not? And, would this would open a lot more opportunities where the margin is a little tighter because you wouldn't have to pay agents and CC?