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Updated almost 9 years ago on . Most recent reply

User Stats

279
Posts
154
Votes
Andrew Taylor
  • Contractor
  • Magnolia, TX
154
Votes |
279
Posts

Need Advice Quick! Investor Terms

Andrew Taylor
  • Contractor
  • Magnolia, TX
Posted

I have a lead on what seems to be a good candidate for a fix-and-flip deal, and I've got tentative approval from a lender. However, the lender is requiring 20% down, which is going to be somewhere in the neighborhood of $75k. I'm currently looking for an investor (or investors) to fund that portion of the deal.

My question is, what kind of terms are typical? Is it a percentage return (i.e., you put in $75k, and when the project sells, you get your $75k back plus x%)? Or is it a percentage of the profit (i.e., when the project sells, you get x% of the profits)? Or something else?

I really have no idea what's a typical arrangement, and I don't want to A) get screwed or 2) look stupid. Thanks in advance for your input. (And if you want to invest, PM me!)

Most Popular Reply

User Stats

279
Posts
154
Votes
Andrew Taylor
  • Contractor
  • Magnolia, TX
154
Votes |
279
Posts
Andrew Taylor
  • Contractor
  • Magnolia, TX
Replied

I appreciate the input, @Corey Woodruff. Any advice on what those terms ought to look like?

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