Congratulations on being able to make the transition. I have a client that did the exact same thing and now is on his way to making his mark in the business. There are pro's and cons to each of those options. In my opinion the best choice would be to see what position you are in now and which one will benefit you most on getting the knowledge and ball rolling for you on your own
Hello! I'm pretty new as well, but from all the books and podcasts I have read and listened to, I can safely say that 50% percent of something is better than 100% of nothing. Plus, the knowledge you receive from the coaching could be invaluable in the future. The first few deals are not meant to make you rich anyway. So, try to take as much education and experience from it as you can. Hope this helps a little!
So my $0.02 is that first, if you are concerned about going at it alone, read more books to get a stronger foundation. Forums and podcasts are good, but I still don't think they are substitutes for books. Use the education to mitigate your risk. There are tons of great flipping books out there.
Next, if you are wondering which route is better to go for financing, Hard money or partnership. Calculate your return and see which one has a better ROI. For short term, (Profit / investment), which includes all your holding costs and rehab costs that YOU pay for.
What I did for one deal is I combined a HML and a partnership. HML 75%, parternship 25% + Costs. You do all the work and project manage. Then split the profit however you want to cut it. I personally did a 10% flat return on the money they invested. I got the project done and refinanced (instead of sold) and gave them their money back in 5 months. 10% return in 5 months is 24% annual rate of return for my investor, needless to say, they were pretty stoked. I had no money in the deal, thus I had the least risk (minus your reputation), and any profit is an 'infinite' return.
Hey Max, I am in very similar shoes with 10 months of Active Duty left. I got into my first two deals the same exact way. I took out a $20,000 personal loan and purchased my second and third property soon after PCSing.
I would absolutely do the 50/50 split because like it has been stated at the beginning it is all about learning, if money is made it si just a huge plus.
I know this is late in the game, but which route did you end up taking? I am currently Active Duty and flip a house at every PCS. I still haven't decided if I will be getting out or staying in but hearing others make the jump is reassuring.
@Maxfield Shepard , I hope you are out and flipping houses full time. Let us know what you ended up doing and how things are going! I would like to hear about it too.
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