Funding

2 Replies

My brother and I have found a property that we want to rent out for cash flow. How do we get investors to fund it. 

Present them with a full analysis, good return and exit plan if things so south.  You need a promissory note and mortgage agreement in you are looking for private money.  Get a lawyer to draw them up for you.  

I think there are ton of different answers to that question. But as usual, its much more difficult to answer a question like that without asking more questions. :-)

1) Do you have any existing rentals? 

2) If so, how long have you been investing?

3) What are the returns on your existing properties?

4) Are you/your brother putting any money at all into the deal?

To me, those are some of the initial questions that you would probably need to answer for someone to give you some meaningful feedback. 

If you're new to investing, then I think you're going to need to look to give up some equity in the deal in order to bring an investor on board. Not sure that many investors are going to lend you money in exchange for a a 6 or 7% return when you don't have any track record at investing.

If you're asking them to put up all the money and you have little to no experience, then you might have to split the deal with them 50/50. i.e. They put up the money and you and your brother own the property with them 50/50. 

Maybe you work out a PM fee out of the profits and then split the remaining profits 50/50. Or maybe you simply split it all.

But a lot will depend on your experience as investors, how much money - if any - you can put into the deal, and/or how comfortable an investor may be with giving you their money.

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