Any ideas on investor/lending contracts?

Question

I'm going to approach a friend to see if he is interested in lending/ investing monies into my real estate flipping venture. Not exactly sure what options to offer him or how to write up a possible contract.  I know it really depends If he decides to lend or invest, but would like to have few fair/creative ideas to make this deal work. Any suggestions would be much appreciated!

Jeremy Tillotson · Answer

If you are flipping, it may be worth something to stay away from payments, then if things take longer you are not the only one suffering. Obviously everyone wants it to sell, just if it doesn't monthly payments can eat at your bottom line. I would offer more percentage on the back end, and if he says no give him a lower option with interest payments.

John Geldert · Answer

Thanks @Jeremy Tillotson, I definitely agree. He may also ask me what my proposal is so want to be ready for that. Sales is not really my strong point but if I want to make it in this business I understand it's something I will have to work at.

Jeremy Tillotson · Answer

You really need to talk to him and see what he is looking for first. One guy may want monthly payments, some people want a percentage of the profits. Its worth asking what he is looking for before drawing anything up. Remember friends can sometimes be the hardest to negotiate with.