Updated almost 5 years ago on . Most recent reply
Investor's cut of the pie
Hi BP community, I'm starting to acquire investors to buy rentals with me. My question to you is, what are some methods to figuring out how much of the profits go to the investors? I understand how dividends work in a stock, but I'm having a hard time getting an answer, from the internet and books I've read, about pay outs to investors in RE. Maybe you all have some ideas. Thanks!
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It sounds like you are looking for lenders. Everyone is always looking for lenders. How much to pay them is always the question. Some want 10%, some are ok with 5 or 6%.
But if you have a steady regular job, like you do, you want to buy the house, fix it up and then hold it for long term? right?
You might use the friends and family to buy and rehab, then go to a bank for the long term money at the 4% interest rate. Friends are not going to go that low. The friends might be your hard money and will probably want 8%. Thats a solid rate. They should probably stay as lenders and not investors.