I have a couple questions and am I hoping to get your opinion on this subject. I want to partner up with an investor who brings the money to the table. I will bring the boots on the ground and manage the property. I have herd a couple different ways of doing this but I am just not sure which way is best for me. The first scenario is that the investor brings all the money and I bring the ground operation. I then would pay the investor 10% a year on their money from the the rental income of the property. Then in 1 -5 years refinance the property and pay the investor back. With this kind of deal I gain ownership when the property gets refinanced correct? The second scenario is that the lender/investor brings the down payment and all closing costs. I would take a mortgage out on the remaining amount and be the main person on the ground. My concerns with this is that I will have to pay the lender 10% on what they have brought for the down payment and I will also have a mortgage with most likely a high interest rate too. The price range for this is $500,000-1.5mil. With all the paying out each month in just mortgage and investor I am not sure if this is the best option because it does not leave much room for profit. I understand that every deal is different and it is all about the numbers but can you give me some advice on these ideas and how you might structure something like this with a partner of your own.
10% a year is a very high interest rate for a buy + hold.
Why don't you find an equity partner, and ask for a small cut of his profits as the manager of the whole operation?
Adrian Chu, Adrian Chu & Associates | Horizon Real Estate | [email protected] | 2064075452 | WA Agent # 107768, WA Lender # MLO-920749
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