How Does OPM Investing Work?

Question

Account Closed · Answer

Private lenders dont really care where you are getting the down payment. I say don't really because they are just measuring your viability to pay them back. That borrowed down payment may or may not affect their decision depending on other things like your track record, how this particular deal looks etc. It's up to you to sort out what happens with profits/share of the deal. I would say as a general rule of thumb if you're getting the downpayment with OTM if you have sufficient collateral outside of the property it self that is a good sign to a lender.

Chris Seveney · Answer

@Yousuf Kaleem

You typically cannot raise funds from multiple entities (howey test) unless they are providing loans.

How you structure your agreement with OPM can be done however you want it, but it just be enticing enough to get the lender to fund the deal.

Jim Pellerin · Answer

@Yousuf Kaleem on 1. Flip - You left out a lot of expenses, There will be acquisition costs, holding costs and disposition costs. Most flippers estimate 15% of the ARV for these. So on $450K, that's another $67K. So that means your profit is closer to $150K -$67K = $83K. As far as how you split it will depend if they are equity investors or debt. I'm thinking they are equity based on the way you explained it.So the easiest is divide it by 3 so about $28K each. This is a really good return in this hypothetical example. Or you can take half and they split the other half. Or you get them as debt investors and pay them 15% or so during the time you have their money.

How Does OPM Investing Work?

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