Recommend a compensation model between a rehab developer and financial partners?

[Eddie Brown]

I've been a broker for 7 years. I recently moved to a new market where rents are relatively high against low purchase prices. I am tempted to set up an LLC and offer investment opportunities to my clients back in Massachusetts.

What I don't know is how to structure the deals. I need about 25K/per building and can generate an above average return within 3-6 months. I am willing to manage and locate tenants as well. What do I offer investors? Advice is appreciated.

[Champak Shah]

I am surprised --are you going to keep RE License ? Not making enough as a Broker ?
How can you manage full time --find deals, do rehab, find tenants and manage property and still keep RE Borkering ? there are only 24 hours in a day --first you need a well thought out Business Plan -- supply and demand as well as appreciation study for new area-- if homes are selling cheap and rent is high --may not be long before you have competition --

Several ways-- Have an LLC and go Private Placement offering--to rasie $1.0 million --
and buy 10 to 20 houses in one year---or even six months --if you are aggressive and have foreclosures or fixer uppers available in area-

25K per building ( hosue) - may not be enough and too much paperwork -- too slow process-

You need to decide how much your time is worth -what can you make as salary -full time -
minimum $80,000 per year - subtract all expenses --car -mileage , meals etc --then project profit and offer 50 % of profit -- also
need to consider income taxes --deprecition as well as capital gaines tax--need to run projections over five years -- how many houses will you buy and how long will you keep ? How many investors do you need ?
What is the exit strategy ? what happens if some one needs money back due to some emergency ? what happens if you get sick ?
how will you leverage ? can you get mortgage ? can you afford hard money ?
need to decide specific strategy --seems like you are planning to buy, do rehab and rent - hold- run by some numbers --and see what return do you get --