What to offer new investors?
I'm meeting with a new investor tomorrow. He has the potential to add a couple of million to my working capital.
He's been interested in getting to know my business and we've talked quite a few times. My read is that he wants to tiptoe in before just handing me a ton of cash, which is expected.
I just secured a pretty sweet flip. Under contract for $206,500 with a $340,000 ARV. My estimate is $50,000 in rehab.
With investors in the past, I've offered to split the first deal profits but on this deal, I think it will set an unrealistic expectation. I'm estimating the total profit will be ~$63,000. So paying out ~$30,000 for $260,000 invested in 4-5 months is a bit much to me.
With seasoned investors, I normally offer a flat rate of 8-10%.
I'm curious how others have structured their first deals with new investors.