Needing advice on what to pay % to an investor???

[Linda Sloan]

We are new to flipping houses though now new to remodelling and construction.

We wish to move faster than we are presently doing and to do so we need cash.

We are reaching out to investors but feel this is a mine field and some just happy to take all of our hard earned cash..😕

I would be intrsted to know what bigger pocket money investors feel is a fair return on their loan 

Also a time period in return. We do have our own ideas but we need advice...maybe we are wrong.

Thank you

Linda

[Michael R.]

People will provide you with all sorts of percentages, but it's really going to come down to what number still keeps you motivated.  How much "meat" do you find acceptable to move forward with the project after everyone takes their portion?  I would also add a fudge factor in there so you don't find yourself eating any unexpected costs in order to do right by your investors.  I agree that 10% of a good deal is still better than 100% of no deal, but what is all of the aggravation worth?  

Keep reminding yourself of all the value you bring to the table as well.  It's easy for people who provide the bulk of the financing to let their ego take control in negotiations and it's important that you let it be know that finding the deal, having reliable contractors on your team, and managing the project are an equal, if not majority, part of seeing these projects through.

Not to mention there aren't a whole lot of passive and marginally secure ways for someone to earn a high percentage on their money.  Start low, know your walk away number, and if it works for all parties involved, great!