Flipper/Rehabber · Hartsville, SC · Member since 2021 · 9 posts · 5 votes
So i have recently bought my first 3 investment properties last year and everything is going almost perfect (praise the Lord). 3-4 people who are close to me have heard what im doing and all are willing to invest somewhere around $20k-$25k with my next deals to make some money with me. Heres the problem: im ignorant on how to structure something like this and what kind of return i should promise them to keep them happy enough to reinvest on more deals.
Lender · Costa Mesa, CA · Member since 2018 · 337 posts · 245 votes
1y
Structuring is easy -- set up a separate LLC with this group, allocate % of ownership on the LLC based on % of ownership in the properties, capital investments, etc. however you'd like. Use that LLC to buy/ hold/ finance the properties. Someone will have to be guarantor on the loan (unless you're buying cash).
Personally, I would be very clear and up front ab expectations ahead of time, in writing, so there's no confusion down the road to ruin relationships.
Accountant · Denver, CO · Member since 2020 · 392 posts · 183 votes
1y
If they don't want to partner and want to just loan you the money, you can have a separate Note Payable with each of them and use Excel to calculate an amortization schedule and interest amounts.