Ideas on structuring a real estate deal

2 Replies

Someone I know and trust needs $7k to finish a real estate transaction. House is under contract but initial lender backed out. He's now talking to another lender and he has $13k for the required down payment but is $7k short in 'required reserves'. He has 4 other properties and needs about $25k in the bank. Obviously there are plenty of factors to consider. My question is regarding potential creative ways to structure an agreement. Any thoughts or advice? He's open to offers. I could just make a straight loan to him. Or, create a partnership of some type where we split profit, heavier to him since he'll do all the work. Or some type of hybrid.

Any ideas or suggestions would be much appreciated. Thanks!

If you know and trust him Id just give him a loan.

Thanks for the response. I have one rental property but have never offered a loan like this. Is there such thing as a 'going rate' for this type of loan? Personally, not sure I'd loan $7k to get $500 back, probably not even $700. $1k would probably do it for me...guess that's a little above 14%. I guess you could say the going rate is whatever it would take for me to do the deal and see if he's interested at that number. Just curious what others have seen. Thanks!

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