We have an Investor! But, they want to own the property...

[Nate Flickinger]

Hello Community,

We have an investor! Our investor is willing to loan 100% of the price, but wants the property in their name until 20% it is paid off. With  an 8.5% over 30 years note.  I am concerned with how long it could take to get 20% paid off and therefore how long to get the property under a traditional mortgage. 

With that, how would the logistics work on paper? Investor owns the property, but we would would manage it? Could we run the entire operations of a property without having our names anywhere? Getting insurance, hiring a management company, etc.? We have not formed an LLC at this time. But I'm wondering if it would make any sense to do that until we actually had properties/assets to protect?

A further conversation is required with the investor to learn how many properties they are willing to loan on at a time. If it is multiple then part of me feels that the terms are maybe no big deal. In one light it is free money. As long as the numbers on a deal work, we put no money down but get the payout of that >$100/door. Plus, if we can grab 6 deals  we can focus on paying down one property at a time to get it transferred to our ownership.

I am grateful for the opportunity that this investor is providing. I'm just having a tough time wrapping my head around it as a concept. Seems different than most other investor relationships I've heard about.

I would be grateful to hear any thoughts of concerns or delight that you all may have. Also open to other arrangements that we could offer to the investor that will still net them a great reward, but may be easier logistically. If that is possible or even a concern.

Thank you thank you!

Nate Flickinger

SW Virginia Area