How to Pay Out Private Money Investors

[Ebony S.]

Hi BP, thanks for your help!

I'm about to close on my 1st flip. For the deal, I used private investor money in addition to my own and hard money.

I was wondering what you thought the best way to pay out my investors would be.

Should I have them complete  a (Request for Taxpayer Identification Number and Certification)?

Should I give them a Check, Cashiers check, or wire them the money?

Also, I'll be returning both their initial investment and the money they earned (interest). Do I only need to document the interest earned on their 1099 at the end of the year if I use the w-9 to pay them?

I don't want to pay taxes on the money that I didn't earn myself because I paid it out to the investors. For example, if the profit is 50k but I paid out 25k to investors, I don't think I have to claim the 25k paid to investors as income for myself, right?

I'm so appreciative of your advice. Thanks so much!

~ Ebony