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Updated almost 10 years ago on . Most recent reply
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Creative deal structure for partnering
BP -
I'm relatively new to REI and I'm ready to take the plunge into my first deal. I have recently come across a deal that I'd like to move on in Natick, MA. I have financing secured with a commercial lender for 75% of the purchase price and 100% of the renovation costs at a great interest rate. I was planning on getting the 25% down payment from a family member, but that just fell through. I don't have any cash to put down at this point, so I'm trying to get creative.
I would like to approach other investors I know about partnering on this deal. I would be asking them to pay the 25% down payment. Any thoughts on the deal structure I should propose? How much profit should i offer them on the back end? Has anyone done deals like this before? Since I don't have any skin in the game, is it too much for me to ask for a 50/50, or even 60/40 (60% me, 40% them) profit split? Assume they would be a passive investor, not involved in the day-to-day of the deal (renovations, etc.).
Any insight would be much appreciated. Thank you!
Dan