Investor · La Porte, IN · Member since 2015 · 31 posts · 2 votes
I'm curious how an investor/partner would recoup his investment if the property ends up becoming a rental (since it doesn't seem to be selling). The funding came from an investor and I managed the rework/upgrades. We agreed to a 60-40 spilt of flip profits in my favor. The house isn't selling and we are considering renting it. Even if I got a mortgage at 70% LTV, he still wouldn't be made whole. How does an investor on a rental ever get his money back, plus profit?
Well one way to do it would be to get the mortgage and then offer the investor a % of the rents for X amount of time or until you have paid him X amount of dollars. This way he will be made whole just not as quickly as assumed, I would make sure to up his cut since you are now changing the deal if you want him to invest with you again in the future.
Atleast getting the Mortgage shows him that you are doing the most you can to pay him back in a timely manor.