How to pay back your investors for rental properties

How to pay back your investors for rental properties

Dallas, TX · Member since 2017 · 2 posts · 0 votes
If you can find someone willing to invest in a rental property with you, how do most people pay back the investor? Do they get a split of you sell the home or do you pay them interest? If it's interest, what's the normal range? I'm guessing it's around 8%? Also, when you pay someone their return, are there any tax filings that you have to give them to avoid any issues? Lastly, do most investors just help pay a portion to the down payment? Thanks!!
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  • Ronald RohdePro Member
    Attorney · Dallas, TX · Member since 2016 · 5k+ posts · 2k+ votes
    9y

    It depends if they are putting money in as debt or equity. What type of rental is it? interest and overall return is a function of risk. If you pay them from an LLC, yes you will file tax returns and issue K1s.

    No, I don't think there is any typical investor format. They range from passive to active equity and debt sources.

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