Fair Return to Investor for Financing House Flip

[Andrew Rascoll]

Hi BP Community,

I am new to REI and currently have 1 STR.

A friend of mine started flipping houses a couple years ago with 2 friends of his through a company they started (which, after speaking with him got me interested in pursuing REI as well).

I am thinking of investing money with them to get some passive income and learn something along the way about that area of REI. While I will be reviewing their past financials and history of payment back to investors before making a commitment, I was wondering what the usual payout structure is in these scenarios, as well as the fair return I can expect.

His company has a minimum I find high, that I can disclose through DM. They promise 10% annualized return monthly starting from when they call on the money, to when they flip the house.  Is that fair/in line with industry standards?

Also, from a tax legal standpoint, I am wondering if it matters that the investment comes from me individually or through my LLC. And best way to handle the repayment of investment and capital gains from the sale - from a tax implication standpoint.

Thanks a lot!