Investor payout structure

[Adam Wigdorski]

So I know real estate. I find deals. I have money. I have access to debt. I have people that will give me money to “partner” on a deal.

I can’t wrap my head around on how to offer or structure this silent partner his payout. Obviously in x amount of years I’ll have to give the principle. How do you structure to offer their return.

Hypothetical deal.

4,000,000

I’m coming in with 300k and they are coming in with 500k.

Say I promise that they’ll receive a return on investment of 8-10% as a silent non managing partner.

I will buy them out in 5 years.

Do you give them a quarterly payment

There not getting equity in the deal unless we sell in year 0-5.

How do you like write up this offer to them formally?