A Private Money Loan from Acquaintance

[Nathanael Sandstrom]

Hi BP Crowd!

I am a looking to get my first deal and am trying to nail down a source of funding in advance (along with all my other key players). And I have a friend who has suggested that she might be willing to be my private money. She is a successful real estate developer in her own right and actually she's my boss and is excited to help me build a portfolio. She asked me what I thought this might look like. I think she might be willing to front me the full purchase and rehab costs (up to $100k or +/-) for 8-10% with deferred interest for a 50/50 on any additional profit from a cashout refi. And (as I think this might be necessary without full seasoning) she's also willing to guarantee the loan. All of which is awesome.

But I also think she's going to want an equity stake, which is not my preference, as I'm trying to build up my own sources of passive income, and hope to create a portfolio that I will allow me to build something to help my daughter out financially when she gets older. But I'm not greedy and if she (my boss) is guaranteeing the loan, might even be necessary. So I am thinking, perhaps an equity split on the NOI for 3 years, and then another refi (after seasoning) to take her out of the deal?

Does that make sense? Is there a different or better way to structure this? I don't yet have a deal, but would like to come back to her with a proposal asap so I'm in a position to act when I get it.

Thanks for any thoughts!