Investors returns percentage

12 Replies

Is there a set rate to offer investors on their return. I'm looking at a  holiday apartment in Cyprus and would need about 20k, investment cost 50K. What should we be offering an investor? thanks folks. And what percentage from the rental income should they expect?
Originally posted by @Brian Kelly :
Is there a set rate to offer investors on their return. I'm looking at a  holiday apartment in Cyprus and would need about 20k, investment cost 50K. What should we be offering an investor? thanks folks. And what percentage from the rental income should they expect?

Short answer: The least possible you can to satisfy their requirements i.e. under promise and over deliver. 

@Omar Khan   Your question is missing a ton of info to the point where it doesn't make sense. 

Whats the purchase price? 

How much cash do you have? 

What does it rent for? 


Start by telling us those 3 

Originally posted by @Lucas Carl:

@Omar Khan  Your question is missing a ton of info to the point where it doesn't make sense. 

Whats the purchase price? 

How much cash do you have? 

What does it rent for? 

I didn't really ask the question, just answered.

Start by telling us those 3 

 

Thanks for he replys

£50k purchase price Inc fees

£20k deposit and costs

We will borrow £30k

Possibly £1200 per month on rent

we have no cash

we will pay it of over 3/4 years

then refinance for 80% LTV

£48k

repay that over 10 years.

we will return the investors initial investment plus they will get a percentage of the rental income.

Is there a percentage they should receive on top of there investment 

what percentage of the rental income should they get.


There is a difference between having no cash and not putting cash into the deal.

There are sponsors that put little to no cash into a deal but have good net worth, liquidity, experience and track records.

That is very different from a sponsor as an example starting out that essentially has no experience and no money to invest in a deal just time and labor. For that kind of situation unless known friends and family an outside investor can see greater risk with a new sponsor starting out and want a very high percentage of equity and return to do the deal. Otherwise they could just go with a proven performer for the market average return and not take on additional risk.  

Brian,
Ask your potential investor as to what their expectations are. Have they invested in the past. How much did they make. This will help you to get the conversation going.
Best!

Originally posted by @Brian Kelly :

Thanks..so say it was a know person, is family or friend..with us making our very first investment.