From active duty military to flipper?

9 Replies

Hello Folks, My name is Max Shepard. I am about 6 months from getting out of the military . For a little over three years I have been researching, and learning all I could about real estate. Late last October I took the jump and took out a personal loan ($7,500) and invested in a flip with a local flipper. Over the next 4 months I flipped a house with him everyday after work. Fast forward a year and I have invested in another property but this time I did not work on it. Today I pick up my check from closing. In a year I doubled my investment and payed the personal loan off. Now my business parter is out of the game and I'm getting ready to go full time into it. However I dont know a lot still and feel like going at it alone is to risky, that and I dont know a hard money lender willing to lend to a first time flipper. I have a friend who said he did the local ria and they did a 50/50 split with him n he loved it. Im just conflicted is it worth giving 50% of a flip away? They do give you two coaches, who I know and get you in with a few hard money people. Sorry for the rant lol any ideas would be great. Also thank you all whether or Not BiggerPockets and the community knows it this website, podcasts and books have drastically impacted my life for the better and I am so appreciative for you all!

Maxfield,

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

@Maxfield Shepard Hey man I’m still active duty and in the middle of my first flip. I went at it alone with no money out of pocket. I made a few contacts on BP and presented my deal I was approached by both individuals trying to partner and an offer for private lending. I went with the private lending and got great terms for a first time flipper. Do your due diligence have all the information ready and ready in a professional presentation and most of all don’t be discouraged by the word no. If you are professional, confident, and have a good deal you will get the money. Good luck and if you like any of the worksheets I use to present deals just send me your email.

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.

@Maxfield Shepard I like your story. I am also from active duty, I got out last September and moved to Delmar, about 45 minutes from Dover. I am just now about to get in actively to real estate and love hearing stories like yours, especially in such close proximity. I have to agree with some of the other comments that 50% of something is better than 100% of nothing, especially starting out. I am very interested to hear what you end up doing and how it all goes! Good luck man!

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. 

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