Updated about 4 years ago on . Most recent reply
Partnering on deals
Hi Bigger Pockets Community! My name is Marc, I do flips, rentals and do a little bit of wholesaling in Houston, TX with my partner. We usually use a hard money lender for all of our flips and a traditional lender for our rentals but we recently came across a private money lender that is open to funding all of our deals! (Exciting!!) BUT since we have never done this before we aren't sure whether to offer equity of profits or maybe just points and interest like we would with hard money lenders. We think this is a good opportunity to establish a good relationship with him and eventually expand into larger deals together. We would appreciate any advice from anyone that has successfully done this before or that has any information on what would work best for all parties. Looking forward to chatting with some of you!
Most Popular Reply
Equity is expensive. Start with debt. Treat them like a HML with slightly better terms - 12%, interest only due monthly, 2 points, up to 70% of the ARV less repairs.
Close at a title company, with promissory note and deed of trust.
Appraisal, inspection, and scope of work.
No blue sky and no blowing smoke.