How to attract an investor...

[Kyle Argeny]

My partner and i have just combined companies. I have oil and gas wells and my partner has some real estate properties. We are already off to a great start using our lines of credit to purchase our first single family home and looking at two duplexes this weekend. But one of our short term goals is to start buying vacation homes. Being these houses can run $800K+ we would probably need to bring in an investor who would help with the down payment to secure a loan. Being in the oil business i understand the ins and outs of what an investor likes to see (returns and the awesome tax benefits with oil wells) plus i also understand how i can benefit from having the investor in the oil business with making money off the deal plus a percentage and monthly fees for operating expenses. But in the real estate world what does a silent partner if you will, like to see in the deal? Obviously the silent investor we would be seeking wouldn't be doing any work just collecting a check for helping with the down payment. Is there tax breaks for the investor? How do you pay back that investor? Do you pay him the percentage he/she put in after all expenses each month? Or do you approach an investor for a short term loan for the down payment and pay him back after refinancing down the road after the property gets improvements and appreciates? Let me know what you guys have done or if im thinking way out in left field i wont be offended just looking for some direction! 

Thanks!

[Jacob Sampson]

These are great questions.  The challenge is every investor and deal may be different.  It will begin as discussions with the investor over what they want/need/expect.  In time you may get a few investors who you work with regularly and will come to some standard way of doing things.

I will say that in my experience finding money is not the hard part.  Finding legitimate deals is.  When I have a legitimate deal I end up being the one to filter out investors.