Is this a solid offer?

[Dee Drake]

I have a colleague that needs 55k to close a deal. Willing to offer 15% ROI in 6 months. Does this make good business sense? Any ideas on how to structure to protect both parties🤔

[Joe Villeneuve]

Don't give the money to him directly.  Run it through an escrow account with instruction that he gets the money only when the deal is set, and the money goes directly to closing.  The deal analysis must show that it can cover your return. That makes sure the money is used as it was intended, and has the ability to pay you back.

Now, to make sure you actually get paid.  Run the cash flow through that same escrow account, with instructions that you get paid first.  Make sure that 6 months of payments gets you your money back, or at least a reasonable amount where your friend is still positive CF.  If there is a balloon due at 6 months, have the ability to put a lien on the property that comes off if that balloon is paid at that 6 month period as promised.  

If the money is not paid to you, then add an interest charge/penalty on top of it...with continued payments.