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Updated about 5 years ago on . Most recent reply
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Looking for investor contract
Hi Guys, so my business partner and I have an investor looking to invest in a multi-family property we are about to acquire. His investment will go towards acquisition and stabilization. We will give him a guaranteed fixed return. He does not wish to participate in any other aspect of the business. Anyone done an agreement of this type and if they can share copies or ideas on what to include. Thank you!
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![Spencer Gray's profile image](https://bpimg.biggerpockets.com/no_overlay/uploads/social_user/user_avatar/481279/1621478597-avatar-spencerg5.jpg?twic=v1/output=image/crop=400x400@0x0/cover=128x128&v=2)
Be careful with using the word "guaranteed" and "return" in the same sentence when speaking with investors. Returns are rarely if ever guaranteed and real estate is not without risk and your investor needs to be aware
If your investor only wants a fixed return and no upside they could provide a promisory note with a fixed interest rate. Just be aware that it may be difficult to get a loan with this structure.
You can also offer preferred equity or common equity with a waterfall structure that is favorable to you if your investor has a low return threshold.