Hey folks:
I may have found an investor with lots of cash. How do I structure the agreement between us. Percentages, payouts etc??
Howdy JBJR:
Give him my phone number. Just joking. I would first ask what he would like to get out of the relationship. I just met one great fellow from Tenn that just wants to be a banker. He is lending me money at 12% on a few deals and then later maybe a few more if I do good. He may want a piece of the action for the money. If it is just equity money and you are getting the loans then he may want 50% of the deal. If he is paying cash for the property he may may want a mortgage and a loan rate on the money plus 50% equity.
It is always flexible. I needed $10,000 once to put together a deal. One guy wanted 40% ownership for the money where I had found the deal and got the hard money loan approved and was going to do all the work. It was fair to him but outrageous to me. I ended up borrowing the money at 18% from another source. Just an example for you. I have tons more but only type with two fingers.
Tewd:
Thanks for the info, this guy wants to be the banker, not real involved in the “daily” grunt work,
That’s the type of lender everyone wants to find. It’s much easier to find the deals than it is to find the financing. Treat the lender right and keep them coming back.
Good Luck!
NDI 