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Updated almost 8 years ago,
How do I pay myself when using investors on a Multi-family deal?
All,
This is something I have been trying to figure out for a while now. I was hoping someone with experience in partnering with investors to raise funds for a downpayment on a multi family deal could talk about how they and the investors get paid. If investors are providing essentially 100% of the equity/downpayment, how do you make money? I am aware of acquisition fees, asset management fees, etc., but I am talking more about money from monthly cashflow and sale of property.
Here is an example (E.g.,)
Let's say we have a 500,000 deal and we will need 125,000 for a down payment. We go to a family member or friend to raise the 125,000 dollars. Let's assume the property cashflows after debt at 10,000 per month. How should the 10,000 dollars be spilt between me and the investor, if at all? Also, what should the split be on the sale profits?
Any insight would be awesome! Thanks!