Structuring Deal with Passive Partner/Investor

[Josh Jacobson]

Hi All!

I'm working with an investor/partner who has pledged ~$300k of his own money to help me get started while I run the operation earning sweat equity. I had a deal under contract that would have used up 150k of his commitment and 5k of my own, but he very much did not like that he had to be apart of the LLC and that he had to be a guarantor on the mortgage. The deal fell through because a bank switched terms on us during underwriting, but I was wondering if there is any way to structure around this problem. He offered to deposit the money in an account, does that work? Are there any other options?

Thanks in advance!
Josh

[Andrew Kerr]

@Josh Jacobson when you look for financing, there are non-recourse options. This will make it so he doesn't have to be a guarantor. You won't have as good of rates as a conventional loan, but there is less risk.

Also, congrats on finding what looks like a great money partner!