Foreign Private Money Investor

[Nixon Vayupak]

I need some assistance here and would like to know how should I make this work.  A group of private foreign investors approached me and would like to invest on any current and future house flips that I am working on.  They indicated that they are very happy with a set percent return off of their investments in a year.  They are open to being in first position on a lien or not be on any liens, deeds or real estate transactions besides having my company pay them out.

What type of strategy should I approach this if I do accept their money.  1. What steps are needed when accepting their funds? 2. What is the best way for structuring a payout?  3.  What are the tax implications here for a foreigner and how should that be approached?

[Jeffrey H.]

My high level steer is that you should treat them just like a local California investor.  They need to establish a local business entity you can receive funding and distribute proceeds to just like another local.  Don't let them make their geographic location your problem - that's their problem.

Come up with a couple options you think are workable and have your real estate attorney confirm.  I guess a CPA could help for any taxation intricacies, but I don't suspect any different than a local deal if you're disbursing to a local entity.