Deal Structuring: Joint Venture Partner vs. Private Money Lender
I am curious how some of the more experienced Flippers/Rehabbers structure their JV deals? The obvious one is where everything is split down the middle, but what if I don't have any money and someone wants to invest with me. Is it better to just have them as a private money lender? Or are there benefits to doing a partnership and have them act as the "money guy" and I take on the GC role?
I'm forming great relationships with a steadily growing list of private money lenders. I just did my first deal with a private money lender, and I'd like to continue to fund deals this way as I see great opportunity in this. However, I'm interested in hearing if anyone prefers going the JV route as opposed to just using someone as a private lender?
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@John Lyszczyk I think it probably depends on the deal. I've used hardmoney for everything thus but in most all scenarios even with a few points and 12% interest it makes more sense to do that than to split the deal.
I think it also depends on the amount and the nature of the deal. At higher pricepoints I'd be more interested in a partnership or equity split cause those interest payments, and points add up quick on more expensive/lengthy projects.