How to compensate private lender?

[Ben Fernandez]

Hello everyone, I am newer to real estate investing. I’ve spent the last 10 years attending REIAs, reading and researching on the topic, and I’m more interested in house flipping. I currently have a friend who just recently received a large settlement and is interested in investing it in me as a private lender. I will do all of the management of researching, dealing with agents, contractors, the rehab, everything dealing with the project. And he will provide the money. With that being said, I don’t have a large down payment, nor can I afford a monthly payment at the moment. So instead my question is can I just provide my friend a larger interest rate after the rehab is finished and sold? Or provide them a share of the profit, as well as a high interest? Maybe consider a promissory note as well?

Sorry. I have been digging to find the answers for this, just haven’t found them yet.

Thanks in advance for your help!

[Jay Hinrichs]

these things are custom made its whatever your investor and you decide on .. it can be a combination of interest rate for the time the money is out and % of profit.. it can be straight profit split..  bigger peice of the pie should go to the money in this instance since your are not contributing any money.

and its sweat equity on your part.