Private Lending

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Scott Sweitzer
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JV Cash Flow Structure

Scott Sweitzer
Posted Nov 1 2022, 11:23

I've invested in condo units in DC and had recent success filling them with Section 8 Voucher-Holders for above market rents.  The investment is tilted towards cash flow, as there is little opportunity to create forced appreciation.  Currently, I'm meeting with potential cash providers who would be silent partners in future similar investments.  My attorney's Operating Agreement stipulates that the silent partner be paid his full investment back before I would receive any income.  However, because this is primarily a cash flow investment, it seems fair that I could take income alongside the silent partner (once we reach a certain percentage of return).  Does this structure seem reasonable, or do you think that my silent partner would need to be paid back in full before I could start taking income?

Thanks!

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