Private Money - Family/Friends
I have friends and family willing to invest in my real estate deals at an 8% APR, where they are not active partners. I will be getting a commercial DSCR loan. My question is what is the best way to go about this, do I do a promissory note between LLC/investor and is there any special type of insurance I should get to cover them? Also once my investors agree do I immediately have them put the money into an LLC or do I wait until I find the deal and then have them transfer funds to LLC for the downpayment. And will the lender want to see their financials as well?
Most Popular Reply
@Devin Janke
1. What state are you in?
2. If they are providing loans, how many people is it as will they realize they will be in 2nd, 3rd, 4th… position and whoever is last has most risk.
You can pool money but must review the howey test. Most likely you will need to do some type of syndication like a 506b.
- Chris Seveney
