All Forum Posts by: Dwight Bradshaw

Yikes! Just read through this whole thread from the beginning. Lesson learned...I'll tighten up my contract with renters and improve my screening process to try and catch anyone who has been in court before.

However, you can't keep it from happening to you the first time people decide to do this.

Good luck Will!

Welcome James! As you can already tell by reading for several days...this site is great at giving us all a place to collaborate and learn from each other.

We definitely are stronger together than separately!

Enjoy!

--Dwight

J Scott, thanks for the input as well. I'm planning on doing some fix and flips but like you said, will still need a money partner to get the hard money. So, in that case, I would still do the 50% profit split with them, right?

Thanks for the heads up, Ned Carey, I'll definitely look into that more. I didn't even consider that possibility since I read about investor's using money partners all the time. Is there some easy way for a newbie like me to get started into REI with money partners that keeps me legal?

I did a search like you suggested and have read quite a few posts, but I'm still a little confused. I'll keep reading.

Thanks Ann Bellamy! I like that approach. It doesn't seem outrageous to me at all. I could see myself starting out at 50% of profit and a determined interest rate on the down payment that they provide.

Then maybe as I gain experience I would reduce the percent of the profit that my money partner will get as long as it's projected to still be a really good deal for them.

Like I said, I want my partners to all feel like "Wow! This is a great deal for me!" And I would like to WIN financially as well!

Ann Bellamy that makes sense. And I really would want it to be a win/win. Are either of the other two options enticing to you, or would you have a different and better way to make the offer appealing?

I do recognize that with experience I probably will gain more because I will gain trust with finance partners due to my track record. So, do you have a suggested way for me to structure on my first deal, and then a different structure after I've done 5 deals or so?

John N. - I definitely don't want to hijack your thread, but am thinking that the responses to even my scenario would help both of us think of ways to do this. The primary difference between us is that I'm not doing this with family members probably. That might make me want to do it differently...but then again if I'm setting up a win for my money partner...maybe not.

I'm brand new at the real estate business and I don't have enough cash or cash flow to fund any deals or qualify for financing on my own so I'm planning on getting money partners in whatever I do, at least until I can fund them myself.

My thoughts about how to structure this so far are...plan to give my money partner 10% APR on funds invested. So, I would find the deal and manage all parts of it and they would just be the financing side of it. That's what we both bring to the table.

It seems like a 10% APR would be good for a passive money investor. We would write into our contract that I would have the right to sell or refinance the property upon my choosing and pay back the amount invested to the money partner. I would get all of the profit leftover after the sale and return the original investment to my finance partner.

So basically my finance partner gets 10% APR and that's it. Does that sound good enough?

Another way to do it is I get all cash flow while we hold and rent and we split the profit 50/50 when we sell...but that's a long time for my money partner to receive nothing.

Another way and possibly the cleanest way would be to split everything 50/50 - cash flow (after we built up a maintenance reserve amount), and profit from the sale in future years.

Thoughts?

Welcome Chad! I'm a newbie here too and to REI but you're going to love the BP Forum!

Michael Quarles, This is a great thread! Thanks for going to the extra effort to log it for us. I'm brand new to REI, and finding the deals seems like my biggest challenge right now, so I'm all ears!

Just wanted to say "Thanks!"

Sweet, I look forward to meeting some of the locals!