BRRRR'ing with Grandma's money??
Hi all,
I'm a total newb to using outside money and was hoping I could get some advice from people who have gone down this road before.
I have done 2 deals so far, both duplexes with conventional loans and I'm looking to amp it up a bit. I recently met an older investor who is looking to sell off a quadplex and I'd love to purchase it. Problem is he isn't keen on seller financing and I don't have the money for a down payment.
Note: we haven't discussed price yet so this is all theoretical. I do know from county records what he purchased the property for and it was in 2012 for approx 90k under current market value. It could potentially sell on market for 220-280 depending on inside conditions.
My conclusion to solve the problem is borrowing cash from my grandparents who own a large dairy farm. They also borrowed money to my parents to start their business 30 years ago. The property is no slouch, but it could be improved. The plan would be perform improvements and refi out, returning my grandparents money in 9-12 months.
How would you go about structuring a deal with this scenario? I would like them to be rewarded well for giving me the opportunity, what is a fair rate for something like this? Or should I be offering points? Should something like this be structured through an accountant?
I guess I understand the theory behind this concept, but I'm not sure how to physically put the plan into action.
Thanks