have the interest of a private investor that is willing to work with me. Can anyone suggest a certain article or book on setting up deals with other people’s money and what are the guide lines to giving them their cut and you getting yours?
It is all negotiable depending on the deal. Do you want a partnership or lender? Can you get the financing and all you need is some money or do you want the PI to get both? Here are a few examples of some deals I have done.
As a mentor to new investors if they find a deal I will get the financing and find the money and help them do the deal on a 50-50 basis. They do the day to day rehab etc.
If I find the deal and get the financing and all I need is money then I borrow the equity I need on a second loan at high rates up to 36% annual for short term funds. I usually borrow from hard money lenders at a rate of 14% for 90 to 95% of the money needed to do the deal.
When I have had a partner put up all the money for the deal I have given them 10% interest on the principal plus 50% of the profit. Sometimes the 10% interest will have to be collected at the end if it is a vacant property for resell.
When dealing with a partner it is good to have it all in writing because of memory loss.