How much do I pay investors??

Question

If I receive for down payment from an family or private investor. How would i structure a deal?? Would be formal contract how/where/why anymore input 👍

And how much return would they receive all fairness

Could it be multiple ways of return.

Payback initial investment? We are good thanks

Or continued payment as long as the property is owned ??

If they pay 50% of down payment /closing cost.  What percent of return should return monthly quarterly yearly?

Or if they pay 20% of cost how would this affect the deal?

Or 100% of down payment and closing how would these options affect the deal? And/or % returned monthly quarterly yearly?

Sorry its  several of the same scenario thanks for the input.   Thank you for your time and input.

Las vegas, NV electrical contractor.

Bill B. · Answer

It depends if they want to invest in real estate. You’re adding a lot of complexity if they would be happy with just loaning you the money at a set interest rate. Then you/they can decide if they want their money in a set number of months or interest only.

I took a small loan from my mom for money I didn’t really need ( I simply sent it to bank against mortgage.) because she was earning less than $10 PER YEAR on $30,000. I give her $45/mo. Interest only. I save $20-30/mo, she earns an extra $45/mo and She can tell her friends she’s helping her son invest in real estate. :-)

Stephen DeThample · Answer

If it's family, make it good for you both based on everyone's needs. Pay a fair interest rate so they want to let you borrow in the future. Some people will be happy beating the banks horrible rates currently (0.50% even in High Yield Savings) with 5%, others will be looking to see if it beats the stock market for them.  Private money is usually 8-10% depending on how you set up the deal.  Always make sure to account for these money charges in your numbers to see if the deal works with the included costs.

Best of Luck!