Partnering with a backer to flip a house - but no constr exp!

[CDOtranches]

Is this crazy? Next week I'm supposed to meet with a guy who'd be willing to put up the money while I put in the sweat equity (as a partner) in buying and renovating a house for profit.

I'm all about diving into something and learning on the fly, but I have never worked in construction in my life. I have interned at real estate investment companies but that's it. I've always thought that lack of experience shouldn't keep someone away from an interesting business venture, but a friend of mine warned me that it would, in her opinion, be a disaster if I've never physically worked on a house before.

Thoughts?

 

[REWahoo]

Is this crazy?

If you've never done any construction work, yes.

 

[Bestwifeever]

Yes.

 

[Westernskies]

I'd be more worried about a partner who would hire someone with no experience to do physical improvements on an investment property.....this sounds like a train wreck in the making.

 

[brewer12345]

Ask the investor if he is interested in some swamp land in FL while you are at it.

 

[unclemick]

1. Does your partner know construction?

2. And willing to train you? Expect long hours - more than you anticipated.

If you are both rookies - make a video movie - and be prepared to lose your shirts - price of education etc, etc.

Be sure and make some - what is the most we can lose calc.'s? What if we have to rent?

heh heh heh - I hope you are young and strong.

 

[calmloki]

Crazy yes. real used to things taking longer and costing more than expected here - this tv show comes close to the reality of home renovation:

Renovation Realities : Video : DIY Network

Unless you're talking about picking out a foreclosure and the carpet color to have installed you do not want to start out with a renovation - you or your financial partner will be real real unhappy.

 

[kcowan]

There is a show called Property Ladder on cable that will give you a good idea about what is involved in flips. You will be taking all the risk while the partner will be looking for quick profits. Everywhere that you need to hire a professional, your margin will be under pressure. But DIY often ends up costing more.

I have done major renos and I consider it to be some of the poorest paying work I have done.

 

[megacorp-firee]

Yes you are crazy. You're partner is even crazier for putting up 100% of the capital.
... hope you're still friends when this is over. I've seen other former friends do this type of business transaction ... like watching a car wreck in slow motion.

... but this could be different. best of luck to you,

 

[eridanus]

It will end badly.

 

[HFWR]

One POV...

My BIL is a contractor, and has been unable to find attractive REO properties for flipping. Has his own crew, and years of experience. Granted, he's probably being extremely conservative...

IMHO, you have to buy right (i.e. very cheap), then be able to do most of the work yourself, and/or be able to skillfully direct subcontractors. Hard to do without experience...

 

[Meadbh]

This is so noughties.....