How to determine the correct equity position to offer investors

[Pete Edmonson]

I have started marketing to some private investors the idea of giving equity position in a deal, in exchange for down payment funding. I tried unsuccessfully to find some advise on PB Forums to help me determine how much is usually negotiated. So at this point, I'm looking for some advice :) 

Thanks,

Pete Edmonson

[Brian Ploszay]

1.  If you get a loan, then only you are a signer on such a loan?  If the equity provider does not sign, their return and participation should be less.

2.  Many loans will not allow an equity partner to not sign the loan.  Consult your lender.

In years past, I provided a 20% equity position on a deal.  And an interest rate on the equity.  Giving away equity is actually expensive, but if you are under capitalized,  that can be your only choice.   It is not a good idea to invest in real estate if you have no "skin in the game."  AKA money...