All Forum Posts by: Amit P.

Thanks for organizing, I will try to attend, might be a closer to 6 though.

@Shay Rosner Not sure I understand your question but I'm 4 payments in and so far so good.  I had a delay with one of the payments by a few days which was due to some admin error, i'm told it's been corrected now.

@Nicholas Aiola Hi again.  Wanted to get some input on the following.  Let's say I borrow 40K from a friend (written agreement with a 5% simple interest rate for 6 months (personal loan made directly to me).    I used that money to invest in real estate or whatever.  At the end of the 6 months I pay back 42k.  Do I have to provide any kind of tax related document to my friend for when they file their tax return?  Or do they just declare the 2k in interest payments on their tax return?  If I have to provide documentation what kind of documentation and would that mean I need to work with a tax pro or can I generate it?

Second scenario, if I borrow 40K from a relative overseas, same terms as above then pay back 42K at the end of the 6 months,  Do I have any potential tax issues?  Would I have to do any kind of tax withholding on the interest I'm paying to the overseas relative? I'm thinking not since there would be a written agreement...I'm thinking as long as I send the money and keep documentation it would be up to my relative to ensure they follow the tax laws in their filing country? Are there any other issues I might be missing?  tia!

Thanks

Have you done any deals like this before? If so you might want to create a 'file' to show your track record, then create a one or two page document which shows this proposal (and how someone might benefit from it as an investor) and then see if you can find someone willing to lend you the money on BP! This might be a harder sell if you are new to it. Beyond that is sounds like HML is the way for you to go.

@Albert L.  @Rob Drum may have some recommendations.....Rob?

@Nicholas Aiola, what a wonderful thread, thanks for all the info!  Curious on your thoughts on the following scenario.  Person A lives in US.  Person B is lives abroad and is not a US citizen/resident.    If they want to combine funds ( both investing the same amount) to invest in real estate flips in the US (basically providing hard money then splitting profiles/interest/returns 50/50) what would be  good way to structure this?  

Do they form an LLC together (i.e one LLC for person A (LLC A), one for Person B who is the non US person (LLC B) then those two are members of another LLC (LLC AB)? LLC AB would be the entity that provides the funding for the deals. Not sure how taxes would work for a foreigner?

Thoughts?  TIA!

Welcome to BP! @Brighten Miller.  Be on the lookout for the monthly BP meetings in downtown...you can probably connect with a few folks and get suggestions for CPAs and attorneys

@Anthony Grepo I'm not sure what you mean by building equity from mobile homes but from my limited knowledge of them I doubt you will make money with a mobile home, they are generally terrible investments ... But if you are taking about a mobile home park that might be different. Learn as much as you can from podcasts, books and talking to other pros (as mentioned by the first reply. Search for podcasts on your podcast player of choice. The obvious one is the BP podcast. There are tons of others. I would recommend Keith Wienhold's Get Rich Education. While you learn use that time to try and save up money. There are options like house hacking that you might be able to do with less money...

Rather than presenting it as 'we need to borrow money' present it as 'we have an investment opportunity for you'.   If they have cash reserves then I am sure they would be interested in the chance to earn a return way higher than what they are currently getting (assuming it's sat in a checking account or something similar).  Present it on paper, maybe with a picture of the property and all the details written down (cost, break down of rehab costs, expected resell, expected PROFIT for the INVESTOR).  Make it clear on how much you are looking for, what its for, when it will be paid back and what return. etc.  This will help you look more 'professional' when presenting the idea.  If you do not have a track record then you may need to figure out what you can do to help provide a little more security.  Can you sign a promissory note?   Do you give them a higher than normal cut of the returns?   Having your own skin in the game will also help make the deal more attractive to any investor.

To go along with what others say it is probably best to avoid lending to family members, unless you willing to lose it all (and still continue to have good relations).  That said I get sometimes it just works out that way.  If you are nervous about putting down 25K, can you do a smaller deal and start with say 12K?  Build up a 'business' relationship and grow from there.  If you proceed I would suggest putting everything down in writing (loan amount, interest rate, pay back date, what happens if payback date it missed etc).  Then make sure you have an open discussion with the four of you (you two and both spouses), then sign the doc in the presense of all 4 of you...if everything is discussed and written down it should help set the exceptation.  5% does sound a little low.  Good luck with whatever you decide!