All Forum Posts by: Christopher Villa

@DavidAbbate. My goal is to return his money first before any profits are realized. I also plan to put some $$ in as well during rehab, so it's a shared responsibility. But, overall, my goal is to protect his money even if I have to take a hit. All in all there's risk for both of us and I can't guarantee that either of us make $$ or lose it. I also would never enter into an agreement where I guarantee that he gets his $$ back. All I can do is calculate the risk and do my due diligence up front, so we mitigate the chances either of us lose $$.

Thanks @WillBarnard! I'm thinking about engaging my attorney to fine-tune the agreement. Unfortunately, this particular property postponed at auction, but we will be looking at different props to set up the same agreement. 

Thanks @OdieAyaga! I think I'm going to structure this is a waterfall agreement. All reimbursements, closing costs, holding cost, expenses, renovations, financing all taken care of prior to any profits being distributed (if any). Once these are all taken care of, his 32% is being based on a 6 month close (purchase, reno, list, close). If we achieve faster, it gets reduced 5% a month down to 17% at 3 months. In other words, if it's not profitable, neither of us get anything. If it is and after all expenses are paid, he gets 2nd position after financing. For example, if there is a $12,000 net profit, he would get the first $10,200 (17%) of that and I would get $1,800. We think the meat is close to $60-79K on the net, so even at 32% ($19,200), I still stand to make $40K if all goes well. And, that's the key, eh? It has to go well!

In need of a good starting template for adding a partner on a SFR deal I am looking at. Anyone have one handy that they are willing to share? Thank you.

That's what I thought :). I am fairly new at this, just needed some reassurance. Thanks @JayHinrichs! Happy holidays to your family!

I am considering bringing in a partner (that I've known and consider a business colleague for over 14 years). He has a ton of integrity, but he is requesting 32% ROI on a $60K investment ($79K total). This is a flip property I am hoping to purchase at auction for $320K and ARV $575K with a 4-6 month timeline purchase to close. I am also using hard money for the cash purchase and rehab. My total exposure on the property is under $5K. Iv'e crunched the numbers and right now, if we win the bid at the $320K, we should net $79K easily on the property, $19K going to him and $60K going to me. It's in a hot real estate area that I'm very familiar with. Net-net, this is the first time, I've considered a partner. I do need one on this property as I'm leveraged in 2 other properties right now. Am I crazy?

I am considering bringing in a partner (that I've known and consider a business colleague for over 14 years). He has a ton of integrity, but he is requesting 32% ROI on a $60K investment ($79K total). This is a flip property I am hoping to purchase at auction for $320K and ARV $575K with a 4-6 month timeline purchase to close. I am also using hard money for the cash purchase and rehab. My total exposure on the property is under $5K. Iv'e crunched the numbers and right now, if we win the bid at the $320K, we should net $79K easily on the property, $19K going to him and $60K going to me. It's in a hot real estate area that I'm very familiar with. Net-net, this is the first time, I've considered a partner. I do need one on this property as I'm leveraged in 2 other properties right now. Am I crazy?

Hey folks! I am almost 60 days into my investment career, have a foreclosed property I bought at auction and just starting the rehab. However, not sure I want to live in the foreclosure world long-term, mainly because of the speculative nature (as-is, eviction challenges, etc). Perhaps a few more, but I am asking any of you if you have recommendations on getting other types of leads (tax liens, pre-foreclosure, divorce, etc). I am currently using PropStream and have looked at REIPro and Deal Machine, but I've noticed they aren't as current as I would like. Please let me know your best recommendations that are working for you and you've executed on consistently and successfully. Thank you!

@John Oh I applaud you for doing this early on in life. If this was easy to do and make this type of calculated risk, most folks would be doing it, but most are afraid. I'm 52 and have 2 teenage kids, a huge mortgage and tons of obligations, college tuition bearing down on me soon. However, I just went out on my own in RE after selling a small business (which felt like a JOB after 13 years). Ultimately, I have been an entrepreneur for over 20 years and it was the best decision I ever made to ditch working for someone else. Risk does ebb and flow and is always there, but just start the game and know that this is part of the game.  A lot of folks will tell you NOT to follow your goals here and don't quit your job, but if you're like me, you have to go 110% in to succeed. Know yourself there and know what you can tolerate. Carefully, calculate your moves up front before you move forward. And, find a mentor that can help you...but ultimately, you have to leap! I leapt on Sep 1, analyzed over 75 properties, bid on 17 of them at auction, 12 postponed and the others I was outbid. Just this last Friday, I struck on a meaty property built in 2006. I expect to turn this around in less than 60 days (rehab and sold). It took a lot of work to get the prop, but so far, I can now say I jumped in the pool. My hope is that you do too and I can't wait to hear about your successes. Good luck and thank you for sharing your journey!

Of note, I just purchased my first foreclosure prop at auction this last Friday, so the adventure begins.

Ha! Thanks Ron. I actually just bought my first foreclosure property, so I'm on my way, but still lots to learn!