Skip to content
×
PRO
Pro Members Get Full Access!
Get off the sidelines and take action in real estate investing with BiggerPockets Pro. Our comprehensive suite of tools and resources minimize mistakes, support informed decisions, and propel you to success.
Advanced networking features
Market and Deal Finder tools
Property analysis calculators
Landlord Command Center
$0
TODAY
$69.00/month when billed monthly.
$32.50/month when billed annually.
7 day free trial. Cancel anytime
Already a Pro Member? Sign in here

Join Over 3 Million Real Estate Investors

Create a free BiggerPockets account to comment, participate, and connect with over 3 million real estate investors.
Use your real name
By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.
The community here is like my own little personal real estate army that I can depend upon to help me through ANY problems I come across.
General Real Estate Investing
All Forum Categories
Followed Discussions
Followed Categories
Followed People
Followed Locations
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback

Updated about 1 year ago,

User Stats

1
Posts
1
Votes
Sevve Stember
1
Votes |
1
Posts

Investor / Finder Models

Sevve Stember
Posted

I'm working on some different models to present to an investor. I know there's a million different ways you can package a deal with an investor(s) but I'm looking for some basic models that people have used and found to be effective. What are ya'll using? 

Example 1 - here's one an investor friend used for STR/LTR; longterm holds: 

  • Investor purchases property with cash / leverage
  • After cash sale and capital improvements (finish basement, add a mother-in-law-suite in the basement, etc.), refinance the property based on purchase price + capital improvements, both partners put in 10% to 12.5% cash* of this amount (minimum down payment for investment properties)
  • At this stage, the property becomes a medium to long term hold and monthly rent pays the new mortgage
  • Property management:
    • ~20% of gross monthly income for STR / MTR
    • ~7-10% of monthly rent for LTR,
  • 50/50 split on improvements to property (i.e. new garage or finish the basement, add a bedroom)
  • 50/50 split equity partners, 50/50 split on appreciation

*Possible cash clause: if I cannot bring the upfront capital to the table, then I can buy back in over time, but can’t get more than 50%. Cash flow in that case goes towards managing partner equity stake

Example 2: here's one a mentor of mine told me could work/he has used before with fix and flips:

  • Investor purchases property with cash / leverage
  • Investor funds property renovations
  • Investor recoups investment amount (ex: $500k) + ___%  (ex: 7% of $500k = $535k)
  • Remaining profits are split _____ between investor and finder
  • Project management fee: _____/month paid to finder during property renovations to oversee contractors, hire contractors, get quotes, purchase supplies, obtain permits, etc.

Example 3: And here's yet another a different investor friend told me about for STR investments:

  • Investor purchases property with cash / leverage
  • ~2% (of home value) finders fee 
  • __% equity stake/ownership to finder
  • __% management fee to management company

I know this is a can of worms, but hoping to engage in a productive, kind discussion.