OPM Financing with a percentage ROI

[Kyle Swarts]

Hi guys, brand new to real estate and have been listening to the bigger pockets podcast. On an episode someone mentioned using peoples low interest savings as property investments with a higher return from you.

So from a legal and tax perspective, how does a monthly or annual pay out work? and is it worth it for someone investing smaller amounts like $20,000 with a 10% interest rate just for example.

If someone is passively earning $2,000 a year, but being taxed on it harshly, it might not even be a worthy investment for them at all.

I was wanting to finance an FHA loan on a 4 plex using this strategy. I have done a whole lot of shopping around, but I'm thinking a down payment of around $10,000 would be required. Add in closing costs, lawyer fees, any repairs that are necessary, etc, I'd like to have an investor for around that 20-25k mark for the first one.

Any advice is appreciated thank you!

[Tim Herman]

@Kyle Swarts That would be 5 different properties. 5% down is what is allowed on owner occupied financing. Look up house hacking on BP. Investment property the interest rate will be higher usually between 1/2 to 1% . FHA you can get 3.5% down there are some conventional mortgages for 3% down and many banks and credit unions offer 5% owner occupied mortgages.