1. Private Lending (Debt Investment) Investors act as lenders and earn fixed interest on their money. Structure: You borrow funds from investors to purchase/renovate a property. Return: Fixed interest rate (e.g., 10–15%) over 6–12 months. Security: Usually backed by the property as collateral (recorded lien or promissory note). Best for: Investors who want predictable, passive returns 2. Equity Partnership (Profit Sharing) Investors provide funds and share in the net profits of the flip. Structure: The investor puts in capital and splits profits with you (e.g., 50/50 or 70/30). Return: Higher potential than lending, but riskier (profit only if the deal succeeds). Involvement: Typically passive; they don’t manage the project. 3. Joint Venture (JV Projects) Two or more parties co-invest and co-manage the flip. Structure: Shared funding and responsibilities; can include labor, capital, or property access. Return: Profit shared based on contribution (can be 50/50 or custom). Best for: Strategic investors or contractors who want active roles or more control. Best for: Investors who want higher upside and are OK with some risk.
To get started, you can educate yourself about the market, develop a clear investment strategy, conduct thorough research, build a network of professionals (such as real estate agents, lenders, and contractors), and consider working with experienced mentors or advisors.
The amount of money needed depends on various factors, including the type of property, its location, market conditions, financing options, and your investment goals. You can invest directly or indirectly through real estate investment trusts (REITs) or crowdfunding platforms, which may require lower initial investments.