Updated over 8 years ago on . Most recent reply
Need Family Loan Advice
I have a family member who is a pretty successful business owner and I know he has money just sitting in a bank. I want to ask him to loan me some money so that I can get into real estate deals. How should I go about it?
I was thinking about asking for 100K at 3% over 10 years. He would get back 115,872 at the end of the loan for a 15.8% ROI or with a 5 year balloon which would get him 111, 674 for a 11.6% ROI.
Would this be a good way to start the conversation? Should I ask for a lower amount like 50K, do a few deals with it to show him the results and gain more trust and confidence with him which could lead to a higher loan amount in the future?
What kind of legal issues do I need to be concerned about? The minimum IRS interest rate for a long term loan is 2.55% so that base is covered.