walk me through the partnership process

[Maria D'Aura]

Among my friends and family I have several people interested in investing in real estate with me. Most just want to invest the $ and be hands off, which I would prefer. My question is.. now what? How is this partnership created and legally documented? It makes sense to me to do it before the property is found since I want the ability to move quickly. So what exactly are we creating with this partnership?

How do you decide what the return for investment will be or % of the profit for the amount invested? I know it can be anything you agree upon...but I'd like to see how others have done it from start to finish.

Can anyone walk me through your process and investor agreements for both flips and buy and holds? Would love to see your contracts too if you don't mind sharing.

Thanks!

[Will Skillman]

We only do cash deals and use private money. Typically we use a simple promissory note and mortgage that our attorney prepares, and include them in the closing docs. The title company records the mortgage after closing. The mortgage includes a draw schedule for renovations and we have the investor provide a payoff when we sell.
Rates are similar to 8-10% on most, some we do an equity split, some are a hybrid. Very short-term deals, so not too worried about interest rate.
The objective is to get your money as cheap as you can, but let the investor make enough that they are calling you asking about the next deal.
Because we provide a good return we have more investors lined up for our deals. If we need money quickly we can get it.