Private Investor

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?

Howdy Ladynrealestate:

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.