All Forum Posts by: Kyle B.

Granison Johnson, how did you get an ARV of $150k? In your first property note, you pegged the value at $130 and owner thought it was $140.

Doug R., just Google "handwritten fonts" and a lot of different websites will pop up. I'd send you the exact website where I downloaded the font I use, but I can't recall which one it was.

Depending on your computer knowledge, it may not be self explanatory how to download the font to your computer. I actually had to watch a Youtube video of a 12 year old explaning it, but he made it pretty straightforward, haha.

Doug R., you can also download fonts that look like they are handwritten. I actually got a call back from someone who mentioned my wife must have written the letter because it was in female handwriting... I couldn't bring myself to tell her it was actually printed from my computer.

I'm sure some people will be able to tell the difference but it will save you a ton of time compared to hand writing every single letter.

Bryan Hancock, interesting comparison to private equity. I think a primary difference however is the expected rate of return for each type of investment. Private equity funds will target an annual rate of return in the 20-30% range, while I think a rehabber will want a much higher return on a house rehab. For example, if I put $100k into a home purchase and repairs, and make a $15k profit in around 4 months, my annual return will be about 45%.

Obviously an oversimplified example, but in general, I assume rehabbers will expect a higher rate of return on their money than PE investors. So that could possibly be a justification for a 50/50 split.

All interesting viewpoints on this topic. The concensus seems to be a 50/50 profit split for a deal. Bryan Hancock, I understand your point, but I don't think the situation you outline describes the situation I'm in (not saying that you're trying to do so either). For the rehabs I am looking to accomplish, my partner will be completely "silent." He won't have any responsibility overseeing the project nor does he want any.

I would be interested in hearing if that changes your perspective at all.

And to everyone else who commented, I really appreciate all the feedback.

Chris M., if your long term goal is to get financing for the property, wouldn't you want to secure a loan from the get go if it was possible (and appears to be based on the info you provided)? Plus if you sell the stocks, you are triggering a capital gains tax plus sales commissions - things that you could avoid for now if you can get everything financed up front.

Also, before you go off selling any stocks, think about what your investment goals and preferences are. There is a lot more to look at than simply cash-on-cash returns.

The housing market is cyclical, so there will always be periods of expansion followed by periods of depression (and a continuous repeating cycle). The primary difference this time around was the complete lack of lending standards that led to the inability of banks to decipher (or caring to decipher) between high quailty mortgage loans and junk loans.

If yields start to go up and hedge funds/investors begin selling homes in order to chase the yields on corporate/govt bonds, then prices would fall based on supply and demand theory. However, I don't think this would create a repeat of what happend in 08-09, since this wasn't just based on supply/demand economics, but on a fundamental flaw in the system.

If or when lending standards start to sink in order to accomodate buying in a "hot" market, that is when I would see it necessary to take pause.

Will Barnard, thanks for the input. You are describing the situation I'm in. My partner will not want to get involved in the deal process - just wants a return on investment after the home sells.

Dawn A., you have a valid point though. For someone who wants to be involved in the day-to-day management of a deal, they really would never bring on a money partner unless they needed it (or to possibly cushion the risk).

Thanks J Scott, that breakout seems to be a good rule of thumb. Appreciate the feedback.

Thanks Michael Sherwood, sounds like I'm on par with how others are structuring deals. Yes, this would be my first deal so I don't have any comparison to go off of. My partner is actually my father, so we are not trying to squeeze every penny out of the deal for ourselves - just want to come up with an agreement that is fair for both parties.

Thanks again for the feedback.