Tax, Legal Issues, Contracts, Self-Directed IRA

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Derrick Stokes
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Protection from partnered investment.

Posted Jul 8 2019, 13:56

Derrick here,

I have an investment opportunity I can afford 80% of the cost. I’m wondering if I should simply finance the rest or I have an option with a friend to invest the rest. I’ve herd many stories of people getting screwed over by friends and family. Are there securities I should look into to protect my portion or shall I go it alone. Your experiences are very appreciated.

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Taylor L.
  • Multifamily and Self Storage Investor
  • Richmond, VA
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Taylor L.
  • Multifamily and Self Storage Investor
  • Richmond, VA
Replied Jul 8 2019, 17:57

Depends on the investment whether a private loan makes more sense than bank debt. Do your family members have investing experience? If not they might not have the stomach needed for investing. If they do have experience then you're off to a much better start.

How does your return change if you bring in an investor vs take on bank debt?

If you do bring in an investor it should all be formally documented and written down in a contract.