Simplest way to pay off a partner? Help me decide!!
Coming up on my next deal. I'm in negotiations and I am looking for the best way to approach it. I am short by about $50,000 to purchase the property. I have found ways to raise the capital. The internal debate is which method would be simplest; borrow the money as a private loan to purchase and use cash flow to pay off. Or allow the individual to partner and take an equitable share of the profits until I can pay them off.
There are pros and cons to both. The private money loan option will significantly reduce cash flow but would allow me to retain 100% ownership and decision making power. Whereas the partnership portion would allow us to take it down much quicker and with substantially more reserves, but it would more deliberation for each decision to be made on the property.
All in all, I feel comfortable with both options and have a little more time before the decision needs to be made, so I am curious to what you all may think. Or what experiences you have been through that would push you one way or another.
Most Popular Reply
@Michael Glaspie - The debt is probably the most simple approach. Keep in mind that you could still be the decision maker on a equity deal, just write it into the agreement.