All Forum Posts by: Andrea Davis-Tarantino

Hey Andrea, welcome! A fair way to compensate your financial partner typically depends on the agreement you structure. You could pay them a flat interest rate on the funds they contribute, similar to a private lender, or offer a percentage of the profits to align their success with yours. Many investors choose a profit-sharing model for true equity partners, often splitting profits 50/50 or based on the level of their contribution to the deal, but ensure everything is clearly defined in writing to avoid misunderstanding/miscommunication.

Thank you, Savannah! That's very helpful!

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Quote from @Jonathan Greene:

Welcome. It's great you are getting set up to start your investing journey, but I wouldn't recommend taking someone else's money on your first fix and flip. The first person as a mentor/consultant sounds great, but I would make sure you know what you are doing before you take on a financial partner. The reality is that they should not want to invest in your first flip because it's too risky if you have never done it.

Hi Jonathan! I can appreciate that advise but being a Realtor and and My Dad being an master electrician (with a much broader knowledge base that goes more into being a GC without a license - and no we won't use him as an unlicensed GC) I feel pretty confident that we can do our first flip and be successful. I'm bringing on my friend as a consultant to further our knowledge base and create some additional comfortability with the financial investors. I'm going through a divorce so entering this journey with my own money isn't any option currently.

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My Dad and I are teaming up to start a fix flip journey together. I have a friend who is further along on the path (has done 5-6 of her own) who has offered to help as a consultant of sorts. I have also been introduced recently to a woman who is looking to be a financial partner. So hard money loan in my name, down payment and carrying costs covered by her but we still need to meet to hash out the details. Here's my question: What is a fair way for them to be compensated? Interest paid on their loan or a percentage of the profit? How is this typically handled?

Thanks in advance for any insight!

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All Forum Posts by: Andrea Davis-Tarantino

Andrea Davis-Tarantino has started 1 posts and replied 3 times.

Post: Newbie over here!

Post: Newbie over here!

Post: Newbie over here!