Private Investor Deal Structure

3 Replies

Hi Guys,

What has been a deal structure that has worked for some of you guys on a typical single family home flip?  Can a simple 8-10% loan work vs giving up equity and how is the investors money treated in a scenario where the deal loses money vs profits?  

I'm really interested in hearing what types of deal structures have been successful for other operators on these forums.

Best,

Mike 

With family I have been able to get 7% to 8%. Im currently looking for investors who will loan 10% for 4 or 5 years to cover 10% of the down payments but have yet to find anyone interested. I would love to hear what has worked for others. The down payments are my biggest issue. 

Originally posted by @Gordon French :

With family I have been able to get 7% to 8%. Im currently looking for investors who will loan 10% for 4 or 5 years to cover 10% of the down payments but have yet to find anyone interested. I would love to hear what has worked for others. The down payments are my biggest issue. 

@Gordon French, just from the other side of the transaction, how do you protect the investor putting the 10% down?  In the worse case scenario, that its a bad deal and you walk away - then the investor would be stuck with the property OR lose the 10% right?

As an investor a 10% return wouldn't compensate me for that kind of risk as I'd be inheriting the problem if it was a bad deal OR only getting a 10% return if its a good deal (i.e. no upside)

Not criticizing you - just curious on your response to that issue.  Solving that issue may solve your problem...

@Khaled Helmi My assumption was a lien on the property. My comment was more to learn what others are doing as I am interested in know how to get additional down payments. I don't know what investors want and neither does the OP. 

I can get signature loans for 18% with nothing but my signature. I have done that in the past for the down payment. 

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