Real Estate Agent · Austin, TX · Member since 2018 · 8 posts · 5 votes
I am closing on a plot of land that has two existing structures and the ability to subdivide the remaining land into two additional lots. Our plan is to BRRRR the existing structures. With the additional lots, we would like to build a duplex on each.
We are purchasing it with hard money 90/10 on the purchase with 100% in rehab for the existing structures. Generally, my partner and I bring in GAP investors who have an equitable interest in the profits once we sell the property. Since our intention is to buy and hold these, but will still need the GAP investors to close the deal, I am wonder what are creative ways to structure the investment and what percent equity would you give an investor in a long term buy and hold property?
Open to any resources you would recommend as well!
Rental Property Investor · Smyrna, GA · Member since 2018 · 974 posts · 645 votes
5y
Following, interesting question. One way is to give the GAP investors a straight interest % on their money. That way for them it is a debt investment, not equity investment and you retain the ability to hold long term.
Real Estate Agent · Austin, TX · Member since 2018 · 8 posts · 5 votes
5y
Joseph - we had tossed that idea around. I think I start projecting on what people would be willing to lend. It seems like we would be getting the better end of the deal, but I guess that is relative to the investors goals. Thanks for the thoughts!