One thing that you'll notice right away in this business is that every deal is different. The way you work your first house flip deal will most likely be very different from how you work your second house flip deal and so on.
For me this helps to keep this business exciting. For you, deal making flexibility is important because it is possible (as we talk about a lot here on the blog) to flip houses without using your own money.
Instead of using your own money to fund a deal, you use other people's money - which we refer to as OPM. Why would you use someone else's money you ask? Well the most likely scenario is that you don't have enough money of your own to fund a house flip deal, which is of course A-OK.
Often times the best house flip deals appear and disappear very quickly. If you have identified a good deal on a property using ARV, MOA and the 70% Rule, then the next step to take is action.
Flipping Houses With No Money | Partnering on a deal
When you do not have any money of your own I urge you to strongly consider a partnership. Partnering on a deal is a great way to get into a deal without using any of your own money.
So who is a potential house flip partner?
Well, your partner is going to have to have some money. Work your personal network and think about the people in your life who have some money and who would be interested in earning more.
Examples of potential partners could be:
- Your dentist
- Your attorney
- Your doctor
- Your accountant
- A friend who runs a successful business
The list of potential partners goes on and on...
Now in most instances a potential partner is not going to simply hand over a large sum of money. It is important for you to be transparent and share the numbers with them. Explain the intricacies of the deal with your potential partner, and be sure that they completely understand how the deal works.
And of course, tell them you are willing to offer 50% equity on the deal.
Needless to say there is a lot of due diligence that goes into partnering on a deal. Be sure to follow all the rules we have talked about previously here on the blog. If you need a refresher just click on one of the below links.
House Flip Partnerships | What's the worst that could happen?
Without a doubt, forming a solid partnership requires a lot of due diligence. Partnerships are just one way of getting a deal done. They work when you don't have any money of your own, and they also work if you'd just prefer to not use your own money to fund a deal.
The most important component to establishing a successful partnership is to take ACTION. Ask yourself "what is the absolute worst that could happen?" Odds are the worst possible outcome is that the person you have approached plainly states that they are not interested.
If someone says they are not interested in doing a deal with you, remember that only means they are not interested at the present moment. Once you have a few successful house flips under you belt, this person may approach you asking to partner on a deal.
At the end of the day it is 100% possible to pocket $15,000 or more in profit without ever placing your own dollars on the table. You just have to go out and give it a try.
Best of luck securing your first partnership - I'll see you at the top!