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Updated 3 months ago,
Question About How to Structure Deals Using Private Money
I feel a bit stuck in this scenario, and I could use some advice.
I'm raising some money from private investors and wanted to run some options by more experienced posters, because I'm a bit unclear as to what the best way is to structure my deals with private investors, or if there are better options that I'm not considering.
Here are some rough numbers to capture a deal that is on my radar:
- Loan amount from investor: $110k
- Yearly Interest Paid to Investor: 7%
- Monthly Rent from Property: $1300
- Monthly Interest-Only Payment to Investor: $642
- Monthly Property Taxes: $71
- Monthly Insurance Payment: $71
- Property Management fees: $104
- Net Cashflow: $412
Now, this is not a bad outcome, and I am fine with it, but I am wondering what someone else might do differently if you were in my position - Should I charge an upfront fee to my investor (maybe $5k or so for this deal and also keep the cashflow as my monthly management fee), or would you instead use the $110k from the investor to BRRRR a bunch of deals, or would you try to just use the capital for one deal at a time? Any advice would be great!