I just put in an offer on a house I intend to use the BRRRR strategy with. I know it was a ballsy move, but I offered over asking, unconditional, to close for September 28th. The offers will be considered tomorrow, and if mine is accepted, I will be on a campaign to raise $100k from private lenders in roughly a month and a half.
My plan is to offer 10% interest to my investors, paid out monthly, take 6 months to 1 year to complete the reno-rent-refi process, and then pay out the investors.
I'm not going to go into too much detail on the deal right now, but I will say that i'm very confident in it. Here's a breakdown of the numbers-
80,000 cash purchase
5,000 closing costs
50,000 reno's, holding costs, interest
175,000 (conservative) ARV
My question is, what should I be proposing to my investors? I don't really know how far into detail I want/need to be going on the entire deal - just the part that involves their money. Buy-flip-refinance-pay out. What sort of details should I include in my proposal? And does anyone have an example of something similar to this that I could use as a template or at least for reference?
Secondly, I understand very well how the process goes - borrow the money for 6-12 months, pay out interest monthly, return it at the end....but I actually have no idea what this deal looks like in real life. ie. paperwork, loan documents, securities, or other agreements. I would love it if someone could give me some direction on this subject as well so that I can properly focus my energies on making it happen.
I would be extremely appreciative if someone with relevant experience could lend me some of their wisdom!