Structure for taking on investors to buy properties

[Paul Wakim]

Hello everyone,

I am grateful to have stumbled upon the situation I am currently in but I certainly need some guidance. A few family friends want to do deals with me by giving me money, so private financing. 

Those of you who have taken on outside money to purchase properties, how was your "entity" structured to protect yourself and your investors? 

Do you have those investors put a lien on the property? 

Do you have them lend directly to the legal entity? 

How do you keep a paper trail of the money lent? If I get a commitment from one family member for $1 million and end up using $400,000 is there a logical way to keep track of that beyond contracts lawyers draw up for us? 

Maybe I'm missing something but I do not know the answer so any help is greatly appreciated. 

I just want to have a legal and concrete structure built for anyone that wants to give me their hard earned money that protects everyone and gives us the biggest tax benefit. 

Thank you in advance! 

[Will Pritchett]

Ours was a loan to us in our name. Several times over. Lender gets first position lien. Note was written by a lawyer. We just send the checks to them and write a receipt. I’m sure we’re missing something but they keep coming back to lend us money so we must be doing something right. In the end, a couple of lenders can be enough to fund all the deals I intend to do. Give them something of value and they’ll likely keep coming back as you help each other out.
Good luck,
Will