I have a friend who is interested in funding my flip. I'm working at figuring out what's fair for both of us but it's making my head hurt. I keep coming up with him only getting like a 6-8% return on his money which seems low but maybe i'm doing something wrong. Can someone please look at my spreadsheet and see what I have wrong. I threw in guestimate numbers so don't judge the flip numbers. Just the percentages and such. Thanks!
Investor · Florida Panhandle/Illinois · Member since 2016 · 4k+ posts · 3k+ votes
6y
Your return is double that because the money was only used for 6 months. If you think about it the interest rate is 10% plus one point. The return cannot be less than 10%. Prorate the return on an annual basis is 12%.
Your return is double that because the money was only used for 6 months. If you think about it the interest rate is 10% plus one point. The return cannot be less than 10%. Prorate the return on an annual basis is 12%.
I guess in my head, the stock market roi is usually around 7% and that's annual. So I was thinking even though it's 10% interest, that is annually and the loan period was only 6 months.