Hurst, TX · Member since 2016 · 192 posts · 114 votes
Hi friends, how do y'all usually divvy up money made from buy and holds that a partner/partners have helped you to buy? For example if I bought a 100k home in my name and needed 20% down and a partner gave me 10k (10%) to help buy it. I obviously won't be able to pay him back right away if I just planned to buy and hold it. What kind of arrangements do y'all usually do or recommend? Same question with multiple partners. Thanks!
Stevo from Dallas Texas
Jessica Zolotorofe Great explanation thank you! So in the JV model, you just pay him monthly until he's paid back in full? What's his incentive to invest then? Do you promise to pay him back plus some extra?
If you have a friend kind enough to lend you money without any interest, tell him I am interested in being his friend also.
I do not. They basically invested in me because I told them I wanted to help them make money too and make sure to give them the dollar amount we agreed on. These people usually give me money, because it will generate more than their checking, savings, or CD accounts. places they wouldn't normally touch their funds anyways.
however in the case that I had a bunch of cash lying around and they suddently had an emergency where they needed it all back asap, I might negotiate to pay off the rest with no interest, but probably wouldn't happen.
@Steven C. Suarez. In the voice of Astro the dog: Rut row Rorge. The BEST thing to do is to have a well defined and written exit strategy PRIOR to getting in business together. It's kind of like when you sleep with an ugly chick. ;-) Well, not really. But you know what I mean. LOL
I bet this person is NOT your friend by the time this one is 'done'. :-(
I think I would discuss that and put it in an agreement before anything happens. I guess we all have ideas about what we think is equitable. And, of course, it depends on what value each person puts into making the deal happen. Each deal and each person is different. This is a good situation to be in, it seems to me.