All Forum Posts by: Mark Cerminaro

Hi, I am thinking about taking a partner on my single family flip which I am closing in a few weeks.

I would be doing everything on flip, purchase, rehab and selling. The only thing the partner will bring is the down money which is 20k and possibly the 1st phase of rehab which is 10k.  

I am under contract and set to close on 2 other properties which are multifamily apartments which I plan to hold, but they also require 20% down. So my cash on hand is cutting it close to do all 3 would leave me with very little reserve.

Question is what would be a fair split for partner? I was thinking around 15% interest and a % of the profits when home sells maybe between 10%-20%  . projected profit on flip is $42,000. They would get the 15% interest on money, at worst case if I just refi the single and rent it. If anyone has done any deals like this please let me know, how it was structured.  Thanks

That deal sounds real good for you...the only thing I would check into is that the contractor has the funds to complete the rehab out of pocket and tie up his cash for 8 months. I am sure he will have to use subs for some work electrical, heating and plumbing. If he is a small contractor with just 1 crew he prolly cant tie up that kind of cash for a long period of time.

If that is all the water you get worst case... you would not need a pump.  do the 15' of drain tile and install the basin with no pump, if your water problem ever got worse you can add a pump at a later time.  We would charge around $1,500 for the above work around $2,100 if pump was installed and line ran outside 10' away from foundation.  Your trench has to fill up to activate the drain tile so basically the amount of water that is shown would not even activate the drain tile so pump would be a waste. 

Sergey,

I am a contractor, with over 25 years of experience. I have a CMA for the property, a detailed line by line estimate of rehab, all lending fees from HML.

If anyone has done any partnerships on this type of deal, what would be a fair split of profits, and how should it be structured?

Thanks

Hi,

I currently have a single family home under contract on which I am closing on Feb.13.  I am also closing on a 3 unit and a 5 unit.  so looking to free up some cash and partner on the single family. 

open to suggestions on how to structure and what would be a fair split?

would be looking for my down money which is around 20k plus maybe the first phase of rehab if interested (I am using a HML on this and everything is approved and just waiting to close)

It is a single family home in a very nice section in PA (lackawanna county)

s.f. 1800

purchase $69,200

Rehab $32,780

ARV $177,000

projected profit after closing costs, holding costs and selling costs  $40,250

I can send more info and proposal of rehab at request

I have tried having the seller carry 20% of the balance and use my lender to give 80% LTV. My local banks that I work with would not allow for that. I did see some posts saying this works but I guess you would have to find a bank to go along with it, which I did shop a lot of banks when I started out.

First thing I would check are the simple things that may be causing your water problem.

does the house have gutters? check downspouts to make sure not blocked and running into foundation.

make sure all grade is sloped away from foundation for at least 6'

sometimes the fix is fairly inexpensive to correct from outside.

is the crawl space vented? if not can cause problems even after most of the water problem is resolved.

if it is all subsurface water would be pretty expensive to fix ---$10000+ depending on S.F. and how many gallons of water you get in area worst case.

would be very hard to give estimate on just those photos

Not sure the split would work out fair...are  you are looking for a partner with good credit to put name on loan and run property from start to finish for 10% of net profit? or do you mean you find property and do all work to get it rented and stable, and the only thing your partner does is put name on loan? 

thank you for your replies,

I would consider a 50/50 split if partner did the financing of projects and I provided the leads and all work involved with rehab. I would also do buy and hold deals on multi family buildings as a 50/50 split.  which I did many more of for myself.

Here is a simple example on my 2 properties that are closing in February and of course i am very selective on my purchase so most of my deals done, are in the same range.

3 unit:

purchase $81,000

currently rented out

3 bedroom $750 no adjustment needed fair rent

2 bedroom $500 nice apartment will raise rent to $625

1 bedroom $500 very nice large apartment will raise rent to $600

NOI $10,090 at current rents

Single Family 1800 s.f.

ARV $177,000

purchase $69,200

Rehab $32,780

projected profit after closing costs, holding costs and selling costs $40,250

Hi,

I am a contractor by trade been in business since 1994, and have been investing in real estate since 2012. I currently have 21 units. I am closing on another 3 unit and single family flip  next month. I have done a few flips in the past also which now I want to start doing more per year.

I invest in Lackawanna County  I do have a few more deals in my area that I am interested in doing. I would be willing to take on a financial partner that would like to invest in my area.

I do have good credit and have several lenders to do deals. I currently have loans with 2 local banks that do commercial portfolio loans , also have 2 HMLs that I am approved with to do future deals. 

I really never considered partners in the past, but now that my cash on hand is getting low with the down money required. I would be open to suggestions and maybe a partnership

also have a very good real estate attorney that helps me close very fast and a good realtor who works 7 days a week and feeds me leads the second they hit the MLS sometimes before.

being a contractor for many years I have great subs. licensed plumbers and electricians that never delay any project that I have going.

I manage all my own apartments. have all the equipment needed to do major rehab/repairs. even dump trucks to clean the apartments out after tenant moves out and leaves what they don't want. which is usually everything.

I feel I have a lot to offer a partner and open to any suggestions.

Thanks