My father just called, and he has decided to purchase an investment property. (Interesting side note: The home that my dad is buying is the home that my parents, my sister, and I lived in when I was about 8 years old. My dad is actually “re-buying” a home that he once owned!) He has asked me to join him as an “investment” partner. Here’s the deal:
Dad will purchase the home.
Dad will renovate the home.
I will front the cash for the renovation.
Dad will sell the home.
He will make a profit.
I will make a profit.
We will both be happy.
My dad is a carpenter, and this will be his first “flip”. I’m excited. (Please note, my only involvement will be on the renovation-side of the deal. I will not be involved in borrowing any money. I will simply be paying for renovation supplies. I will receive a “return” on my investment when the home sells.)
Here are some of the possible outcomes:
1. I make a decent profit (30+ percent return in 3 months) and we continue to do more and more deals together.
2. I “break-even” and get my initial money back once the house sells and we both learn that we are not “made” for the real estate game.
3. My dad owns a house that he can’t sell, I’m out some money, and I learn a very, very expensive lesson.
Will the deal go down? Will I make any money? Will I lose my shirt? As the situation unfolds, I’ll let you know!