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Updated almost 4 years ago on . Most recent reply

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66
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Justin Youngblood
  • Rental Property Investor
  • Apex, NC
10
Votes |
66
Posts

How to structure this deal?

Justin Youngblood
  • Rental Property Investor
  • Apex, NC
Posted

Hey BP,

So I'm trying to figure out the best way to structure a deal. I have an opportunity to purchase an off market property that I plan to BRRR. This property was brought up to me by a family member. Basically they have a neighbors house who is interested in selling. My family member wants to invest $10k and I have all the other capital and the knowledge to do the deal. I would be the one on the loan and their money would be used for renovation costs. So basically I'm doing all the analyzing, managing rehab and managing once complete, negotiating etc. I want this to be beneficial for both parties and it gets a little dicey since it's family. Ideally I would do this deal by myself but since they brought it to my attention and want to invest money then they want in.

Here are the numbers. Any thoughts on how I could structure this and what it would look like? Or should I steer clear? 😂

PP: $170k

Renovation costs: $25k

ARV: $230k

Most Popular Reply

User Stats

188
Posts
68
Votes
Chris Teti
  • Real Estate Investor
  • Southern NJ
68
Votes |
188
Posts
Chris Teti
  • Real Estate Investor
  • Southern NJ
Replied

Hey Justin, just some advice. Anytime you do business with family or friends, go into it just like you would any other business partner. Have an agreement or contract drawn up outline terms, responsibilities, etc. Make sure you are all clear on expectations, decisions, and what happens if the project loses money.

For this deal specifically, if it's just a one off with this family member, it might be cleaner to let them keep their $10K and just throw them a finders fee.

  • Chris Teti
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