Newbie - needs advice on lending

[Bryan C.]

So I am new to the Private Lending scene...I have someone who I am ready to start lending with/building a partnership with but I need advice....

What kind of questions should I be asking to get to know that person better ?

I am looking to structure a deal w/ split profits or a standard ROI....what should we split if I am providing funding and they are providing the rest?

What documentation should we have to protect all parties involved?

What other information would you like to share with me?

[Andrew Cordle]

@Bryan C.

First Congrats on the lending business. I hope an trust that it goes well for you. 

The way you are talking about lending is what is typically referred to as Joint Venture Lending or "JV". Those deals are normally done with one person funding the whole deal and one person doing all the work. Then there is a split of profit that is predetermined.

As far as what forms we use the following:

JV Agreement

Mortgage

Note

If you would like to have a copy of what I use you can PM me and I will send them over to you. 

What you need to watch out for:

How much experience does your "partner" have flipping a property is not easy and if they are new can take a very long time. Which of course will hurt your returns. 

There needs to be a start date or a penalty and a finish date or there is a penalty. Meaning lets say he will start by a certain date if he does not he loses 5% of his share. Then if he is suppose to be done by a certain day he loses another 5%.

We can talk more on PM if you would like. But I have done 100's of these deals. Let me know if you need anything. 

Andrew