I am currently looking at a piece of property in the Chicago area to purchase and tear downa house to build a larger home to sell. I can get a solid deal on the land and house, and with my history in construction I will be the contractor on building the new home. My question comes in the way of getting the financing deal done. My In-laws are the top potential investor in getting me started out in some larger projects on my own. I don't currently have the income to support the construction loan that will be required or the necessary down payment.
Now, I know of several lenders that will do a construction intrest only loan that will require only little down, at maximum 10% down. I have also been told that the interest payments can be wrapped into the loan. I am wondering what a fair return is to offer to my potential investor, considering in the amount of time it will take to build, the amount required to put down, the risk involved and any possible monthly payments. Is a 10% return for say a twelve month investment fair? Is there a good way to structure this deal so they don't retain all ownership in the house and land. I am looking for this to be a "silent partner" deal. Does anyone have a good proposal format that I could follow? I have done extensive market analysis and am ready to put everything in writing. I have bought a few properties over the years and am very comfortable in the real estate area but not so good when it comes getting the financing deal done.

Any help would be much appreciated! Thank you for your time. [/b]