Accountant · Round Rock, TX · Member since 2018 · 5 posts · 7 votes
7y
That's not an awesome deal for the investor investor unless the operator has a sterling track record and the deal is set up to be slam dunk. I'd expect to see it more in the 8-10%, 70/30 range by default. Interest rates have been creeping up - 7% isn't more than 1-2% than I would expect your commercial loan to come in at.
Accountant · Round Rock, TX · Member since 2018 · 5 posts · 7 votes
7y
That's not an awesome deal for the investor investor unless the operator has a sterling track record and the deal is set up to be slam dunk. I'd expect to see it more in the 8-10%, 70/30 range by default. Interest rates have been creeping up - 7% isn't more than 1-2% than I would expect your commercial loan to come in at.
Rental Property Investor · Tampa, FL · Member since 2015 · 1k+ posts · 969 votes
7y
Depends on the deal. If it is turnkey, as Leo mentioned, it doesn't seem fair. But if you are adding value, Evan's 8% and 70/30 split is better.
If it is a single investor, you could negotiate a higher interest rate and then return all of their capital with a refinance or sale at the end of the agreed upon loan length.
Investor · Leawood, KS · Member since 2017 · 178 posts · 108 votes
7y
@Jim Growfer id like to know how this goes.
I am also putting together a deal and considering the offer terms.
I think 8-10% on his/her money and a 50/50 split on a kick *** deal would be a huge win for a passive investor!
Is it fair?... that’s a no win question. Focus on providing a great product for your investor.