Investor deal. Would you take it?
Hi all,
I had a deal pitched to me from a money lender interested in residential investments. He has does commercial for the past 40 years, and does very well. He knows nothing about residential, and that is where I come in. Long story short, here is the deal:
-He will give me essentially an interest free line of credit.
-I look houses 100k-200k with ARV of 180-400k.
-Most houses need 30-50k work of Reno
What the big question is..... He wants to fund the project, while I provide the GC and contractors, then we split profit 60%(me)/ 40% (him).
Most profits will be 30-40k, and we would split that.
I like that I'm investing with someone else's money and paying no interest, but I lose profit. Obviously every house won't be a winner either so when we don't make much money, I won't still be on the hook for paying say 10% back.
This investor wants to sign a 2 year deal with me, and non-compete so I can't use other investors money or go do this on my own. After 2 years, if all goes well, he would be interested in starting a new branch in his company and I manage that.
Any thoughts are welcome!!! Thanks