Real Estate Agent · Atlanta, GA · Member since 2021 · 11 posts · 3 votes
How do you payout returns annually for private money lenders, example I work with hard money lenders to fund my flips and cover the balance with private money, I have some who gave me 10k , 20k
How do you payout returns annually for private money lenders, example I work with hard money lenders to fund my flips and cover the balance with private money, I have some who gave me 10k , 20k
So what percentage should they have annually
This is something you should have discussed beforehand and written up in a legal document. If they're lenders, you can pay them monthly or lump sum interest when the flip is completed. If they are equity investors, you can pay them in a lump sum when the flip is completed.
It is all negotiable. I like to structure the return in a way to where it is is completely paid upon me selling or refinancing the property.
When you do it short term isn’t that a lot more harder and compared to having it annually, in which they see more of a return. What percentage do you typically pay for returns? Do you take into account the amount of money they have given or just the total profit.
How do you payout returns annually for private money lenders, example I work with hard money lenders to fund my flips and cover the balance with private money, I have some who gave me 10k , 20k
So what percentage should they have annually
This is something you should have discussed beforehand and written up in a legal document. If they're lenders, you can pay them monthly or lump sum interest when the flip is completed. If they are equity investors, you can pay them in a lump sum when the flip is completed.
The private lenders are people I know friends and family, I like the idea of yearly so you have more flexibility and also they see more on there investment, what’s a good percentage range to stay around when paying them their returns?