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Updated over 2 years ago,
What should the rate be for my down payment investor.
Hello everyone, I'm currently looking into buying a property with my father as an investor for the DP and Closing Costs. At the moment we are getting close to closing on a home that costs $370k~ with 25% down. At the moment I am trying to figure out what a fair rate would be for my father investing his money, I want to treat him as if he was a non-related business partner. He has asked for a 5% return on his DP investment and a partial share in the monthly rent profit. I consider 5% pretty low, considering he could do better investing in the S&P 500. What do you guys believe is a fair return for an investor who provides the DP? Maybe a 10-15% on the DP amount and/or a 10-25% share of the rent profit?
Thank you for your time,
Daniel