I have tools in my toolbox, just need expert clarification PLEASE
Hello Bigger Pockets. My name is Nathaniel, a upcoming investor in the Austin Tx area. I want to start by saying I love Bigger Pockets and everything they do to provide value to people like me, and many others in the Real Estate world. I have tools in my investor tool box, I have powerful people to help me make things happen, and I have strategies in place. I just need a deal, and clarification on analyzing, and the best way to execute a Joint Venture in a BRRRR or Buy & hold.
A little bit of background about me to better understand my situation. I have known my partner for years, and he has seen me grow my small phone business to what it is now, (Still small, but systemized). We have gone through many small ventures together that have ultimately failed, (like Amazon FBA, small private money lending etc.). And so over the years I have known him to be a mentor to me. He is and has been a successful real estate investor for years, more than I have known him, and so ultimately I knew I wanted to be just like him and learn from him as well. 2 years later, after periodically checking in on each others whereabouts, I explain my whole journey so far and everything I've accomplished. I am pretty confident on the tools I've learned to use thanks to Brandon Turner's books, I'm confident on my strategy thanks to David Greene's book, and I'm confident on my mindset thanks to a countless amount of books I've explored throughout the years, as well as my own experience owning my own small business, and learning from other peer investors through networking.
Today, I'm struggling and a bit discouraged. I have about 20+ wholesalers and agents sending me deals every week, but most deals sent are either asking above market value, or require so much work that a 30k estimated rehab budget does not make since with such little wiggle room for profit minus expenses, usually estimating 20k profit (not sure if that's worth the risk). I've tried prospecting myself to pre-forclosure properties, absantees, vacancies, and old MLS (zillow, redfin, realtor) real estate to lowball offers, but have had no luck finding a deal. I understand the Austin market is highly competitive, but my criteria includes towns south, east, and north of Austin, and still receive terrible inquiries. What am I doing wrong? I suppose maybe I'm analyzing these properties wrong? Maybe I'm not seeing something that many professional investors might? I don't like to bother my partner/mentor too much, so try to send him very few "potential" deals as possible. Does anybody have any examples to explain how they receive a lead from a wholesaler/realtor, and use free services to find out if it is a deal or no deal, as well as what margins are just too risky to go for?
My last question is, say I do find a deal for me and my partner to invest in. What would be the best way for both of us to benefit? My biggest goal is to learn as much as I can, and manage the BRRRR if everything goes to plan, using my partners capital. I have decided to drop out of college (for now) so I can focus on getting my first deal, so therefor don't have much capital myself to work with. So it's clear my partner would get the benefit of obtaining a deal through me, and I would manage the deal to execute a correct BRRRR. Now I understand we can't really "split" cash flow from rent, because there's other expenses needed to be payed. If profit from cash flow is split, it might be so little it isn't worth it for him. I also know the cashout refinance is all his money (obviously) so we couldn't split the benefit of a flip in a BRRRR, unless we just do a regular flip, but I want to build wealth, and so does he. Should we just do a flip instead? What would be the best way for me to benefit other than the ability to learn? If hands on experience is the only thing I get out of my first deal, hoping it's a BRRRR? I'm thankful for the opportunity, but I also don't want to sell myself short.
Thank you for taking the time to read this post, happy investing!