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Patrick says

WookieMan says

why not just buy the property is my take. If the guy is that good at flipping and it's a deal, he should have no problem saying X percentage is yours once my work is done.

I like the this solution.

If the flipper won't trust you, why should you trust him?

The flipper is the one who is finding the deals. Does everyone here, think flipping is simple?

WineHorror1 says

The flipper is the one who is finding the deals. Does everyone here, think flipping is simple?

I've done it. But got loans from banks/partnership though and not friends or family. Or own it yourself and release cash as you see progress and a plan going well as I said. If he's good at flipping, getting money from a bank with a track record is a piece of cake. So it seems fishy.

Even if it's your brother, have you checked tax records from recent flips? Generally you can see who owns the place, potentially loans, etc. Flippers asking for money privately are likely lying to you no matter how much you trust them. Desperate people do desperate things. 5 profitable flips could be wiped out with one bad one and the bank won't loan so they run to friends.

Finding deals just takes time and bird dogging. It's a time thing and frankly not difficult if you know the data and market. You could find 3 in a month or 3 in a year. The key is to not pick shitty one's. If you pick shitty ones, you lose money and banks won't lend to you and you crawl to family and friends to get out of a hole.

Fact is, the guy should have capital in a bank that lends commercially and borrow from them. Higher interest rates, but if I was lending privately the conversation doesn't start until we're at 10%, interest only, and points up front so there's skin in the game. As I said previously, there could be an amazing opportunity for you. It's just what is your risk tolerance. I'd vote no to lending privately unless it's money you're willing to lose and cannot make more in other places. A lien, 1-3% points and 10% interest only and they guarantee title so there's no other bull shit liens.

I managed REO's for about 5 years for banks and you're going to get your ass handed to you if you have to go that route as a private lender. It's mega expensive, which is why I don't see a foreclosure crisis coming with Covid. You want to be on the hook for property taxes and insurance after this guy potentially screws you over and drags a foreclosure out for a year? Can't rent it because you don't own it even if you have a lien. Meanwhile it's dead money and expenses. Potential property damage and vandalism? It's a nightmare.

If you choose to do it, you have all the leverage. Just remember that. No hard feelings. You are 100% more at risk than who you're lending to.

WookieMan says

WineHorror1 says

The flipper is the one who is finding the deals. Does everyone here, think flipping is simple?

I've done it. But got loans from banks/partnership though and not friends or family. Or own it yourself and release cash as you see progress and a plan going well as I said. If he's good at flipping, getting money from a bank with a track record is a piece of cake. So it seems fishy.

Even if it's your brother, have you checked tax records from recent flips? Generally you can see who owns the place, potentially loans, etc. Flippers asking for money privately are likely lying to you no matter how much you trust them. Desperate people do desperate things. 5 profitable flips could be wiped out with one bad one and the bank won't loan so they run to friends.

Finding deals just takes time and bird dogging. It's a time thing and frankly not difficult if you know the dat...

Definitely an interesting comment, Wookie. Btw, can you expand on why you don't think we will see a foreclosure crisis? Seems like we would have bigger problems than 2008.

WookieMan says

WineHorror1 says

The flipper is the one who is finding the deals. Does everyone here, think flipping is simple?

I've done it.

I take my hat off to you, if I understand that you bought a distressed home, fixed it up, and sold immediately for a profit.

I have bought several houses and fixed them up, but I kept them as rentals for years before selling them. Even doing the work myself (electric, insulation, plumbing, paint, but not roofing or HVAC) and even with my own financing, I would not have been able to sell at a profit right after finishing the rehab. Now I did do a flip on my very first rehab house, which I used FHA 203k financing, but that took me 4 months and I made $4,000. I consider that house my "training." That was also the only house I was able to sell without a Realtor.

HeadSet says

I take my hat off to you

And I take off my hat to you for selling at least that one without a realtor @HeadSet

Patrick says

And I take off my hat to you for selling at least that one without a realtor

Not pumping Realtors, but you're at a huge disadvantage if you're not in the MLS. You can for sure do some legwork and talk to neighbors of a house you're flipping. A lot of times word of mouth from neighbors can get it done without brokers involved. Just takes time and a bit of charisma and personality to work the neighbors up. Avoid the broker expense on the buy. That's the key. 90% of the time there's going to be a commission involved whether you like it or not. At least if you want to make the most. And it's usually on the sell after the work is done.

I have bought 3 houses without a Realtor, 1 was a military guy who was transferring and I talked to him before he listed, another was a teacher friend of my wife who I also talked to before she listed. The 3rd was the house I am in now, which I bought direct from the builder. Price comes way down when you have no Realtor and are paying cash.

However, when I sold off the houses I rented out for a while, I was unable to sell without a Realtor. I did get the commission down to 4.5% on two I sold. The problem is that the overwhelming number of serious buyers get a buyer's agent because they are unfamiliar with the buying process. Just for grins I tried to see what "We Buy Ugly Homes" would give, and it turns out to be about half of what the house is worth, plus they want the seller to pay the loan closing costs. They must be looking for some twit who just inherited his mom's house, and will sell for half price just to get the cash today.