Should I loan someone $100k for 10% return?
I connected with someone that I don't know personally who was looking for an investment partner. He is a broker but can't get qualify to cover the purchase of a property he wants to fix and flip. First we thought we'd be 50/50 partners, but then it seemed too complicated and we don't have the same risk tolerance (he doesn't want to get it inspected). So... he wants to borrow 100k for a 10% return. I'd get 10% no matter how long the turn is up to a year. Yes, we'd draw up legal documents and the house would be used as collateral. Here are my questions. How much do I get charged in taxes? Is it the same as ordinary income? Has anyone done similar? Is this a good use of my money? I've been trying to find a better real estate investment but can't find any deals anyway. Any guidance would be appreciated
Most Popular Reply
Passing on an inspection is sometimes good for negotiating.
What I would do is vet this person before signing any contracts.
If someone came to me and wanted me to invest 100k on a fix & flip, I would need to know every detail about this person, which contractor they will be using, their track record and previous experience, etc.