Currently in escrow on a house in Indianapolis with a partner. Looking to fix and flip. I don’t expect to see a lot of profit from this one but wanted to keep busy. Didn’t do any deals in 2020 and feeling rusty. Asking price on the house is $68,000. ARV should be around $120,000.
I am currently cash poor, but a realtor I’ve been communicating with in Indianapolis sent me the info on a listing that had just come to her and she wasn’t putting it on the market. I hadn’t been planning to do a flip – looking for apartment buildings, but it looked like a good deal and they are hard to come by these days.
I didn’t have downpayment money – or at least not enough that I could spare, and lenders like to see that you have money in the bank for 6 months to a year of loan payments, so I called on someone who has flipping experience, money in the bank, and can foot the downpayment and other acquisition costs. I asked him if he’d like to partner with me on this project and he agreed.
We are getting a hard money loan to purchase the property and cover the rehab costs. I created an LLC so we are equal partners. He is okay with me owning a larger percentage but I wouldn’t be doing this deal on my own so I choose to go 50/50.
We had the inspection done yesterday. The report is over 100 pages long. It is going to 3 contractors today who will then walk the property and give us their bids based on the inspection report combined with their own observations during the walk thru.
When we get the bids back, we will check the numbers and see if the deal still makes sense or if we need to renegotiate.
Meantime, I am looking for quotes from insurance agents in Indiana to cover the property and liability insurance once we close and take ownership of the property.
BTW – the reason for this post is to show you that you can buy real estate without putting any of your own money in – but you do need to bring something else to the table. Also, if you have money but no time, you can invest in real estate by partnering with someone who has time but no money. Obviously there is more to it in the details but this is the basic premise that I wanted to demonstrate.