Archive for Flipping Properties
Buy and Hold or Flip with Private Money?
Posted by: | CommentsIs it better to raise private money to buy and hold or flip real estate?
Great question.
If you’re thinking about this, you’ve already got half the battle won – you’ve decided to raise private money. You have picked the right financing option for building a successful and extremely profitable business. Like the old knight said at the end Indiana Jones and Last Crusade: “you have chosen wisely.”
To answer our question, consider my three elements of raising private money: You, Investor, Deal
For illustrative purposes, assume we have the “You” and the “Investor” taken care of – meaning your business plan, offering documents, marketing and other components are in place and you have an investor that is ready, willing and able to place funds with you. Now, you have to make sure that You matches Investor matches Deal.
The Deal component is what you have to focus on – how you are structuring the deal? Read More→
Holding or Flipping: Which is Best for Private Money?
Posted by: | CommentsThere’s a source of some debate about whether private money is better suited for a ‘buy and hold’ approach or a ‘flipping’ strategy for real estate investing. Real estate investors correctly point out that their private investors will want to exit (or the availability of exit) from their investment at a future date, which could cause financing issues with the project.You don’t want to mess with a good thing if you have a nice cash flowing property. So, which is private money best for: flipping or holding?
First of all, you shouldn’t think in terms of either/or. You can successfully flip and hold properties with private money. How you structure the deal, though, will determine the extent of your profitability with each.When it comes to flipping, turning properties over quickly can generate healthy profits for you, but you must be careful to pay your private investors an appropriate rate. Set it up so that you pay them an ‘annualized’ return on their money. Here’s an example: Read More→
