Do you have a specific percentage held in cash, or do you have a multiple of your annual operating/living expenses?

He was discussing how he sets up a 5 year balloon payout but I was wondering if anyone could explain the structure of the contract with me.Say I borrow $80,000 from a private lender, they agree to terms of 8%, and have a balloon buyout clause with a 5 year term where they have the option to roll their current equity forward or they can take their money on the buyout with a refi.Is the 8% a monthly interest only payment that I'm making?

I understand that these might be accounting questions that follow:- If my RE company is taxed at 50% on my investment income and 30% is held to pay off my dividend payouts, is that money that I receive at the end of the tax cycle?

Also, would I be able to make the payout on behalf of the seller?

We spend far less than we earn and steadily build up a cash position with a 30, 40, or 50% savings rate as a percentage of our income.

However, I look at the tax history, and the tax percentage is 6.23%!!!

After you’ve received returns up to a certain threshold then the sponsor can begin collecting their returns and is incentivized to get better returns because they will achieve a greater percentage of the returns once they reach certain staggered thresholds.

Another option is to consider the current market value of each property and use a percentage of value of what you're selling compared to the total value.You had mentioned doing a 1031 exchange.

@Joel Owens thanks for the advice. flip is unsecured. this is in the single digit percentage of net worth, so I haven't put as much energy towards this, but still needing to come to a conclusion. 

I’d give quite a few a call to see if any would lend.I imagine the best path is it to look for deals, partner with someone experienced who can carry the financing and you get a cut/percentage and/or finder’s fee, as well as, starting your track record of doing deals.