All Forum Posts by: Brett Bumgarner

Does anyone have experience with purchasing or building storage facilities?  I am either looking to buy an existing facility or build one and want to understand the pro's and con's of each.  Also, looking to hire an expert consultant in this area to help me acquire or build my first facility, especially the latter.

Thanks!

Michael,

Thank you for the article. It did help as well.

Tom,

Great information! Thank you very much for your time. I will get with a title company tomorrow.

I am trying to figure out how to structure a deal with a family member and was wondering if anyone would have advice for me. My uncle wants to invest in real estate with me and has a lot of cash. He is willing to put the cash in a CD at the bank giving me access to a line of credit for rehab's to flip or rehab's to keep and rent.

Is it a good idea to approach it this way or just get a loan from him every time we want to do a deal? What is a fair interest rate to pay him if we went the route of the LOC? I was thinking 8-10% interest a year based on the amount I need for each deal. i.e. If the project was 200K, the interest rate was 10%, and we had the loan for 60 days - I would owe him $20,000/12 months = $1666.66/mo and multiply that by 2 months which would be $3,333. Is that a fair set up?

Or... is it more realistic to give him the full 10% for the loan?

Also, do I put him on the title or does he put a lien on the house? What kind of legal document do I offer him? A promissory note? Do I draft or an attorney?

I am obviously new to private money lending and really could you some advice to fairly structure this for everyone.

I know there are quite a few ways to structure a deal when it comes to rehabbing a house but I wanted to get some opinions. I want to partner up with a friend who owns a construction company and as experience rehabbing homes to flip. He doesn't want to use his crew (higher end carpenters) to do the work so we will be finding subcontractors. He doesn't have very good credit and doesn't have a lot to put down on the deal. I on the other hand do not have the rehabbing experience but have the cash and credit to fund the deal.

We both decided to flip a couple of house first to see how it goes before we establish a business entity together. So, the question is, if he is going to be managing the crew and the day to day issues and I am funding the deal, what's the most fair way to do this? Should it be 50/50 profit split? Should I put him on title? Should I have his co-sign on the loan so he has skin in the game? Do we need to have some legal document in place to define how profits or losses are to be split? Any advice would be greatly appreciated.