All Forum Posts by: Mike Kehoe

Thanks, Ryan! Have you ever used four cash partners to equally make up the total investment in cash? 25% of the total cash needed per investor? Each investor would be offered 10-12% annualized interest? Just curious as I'm beginning to raise capital and many of my potential providers don't have enough cash to fund 85% of the deal but could do something like 25%. Of course, they could be the 15% partner that you discussed in your example, but in this instance, I'm thinking about how to move forward with these smaller cash partners while we're hunting for a larger cash partner that can put up 85% on future deals. 

Hope this makes sense. Thanks again for your help. 

 Thanks, Greg! Your help is much appreciated. 

Thanks, Ed! This is very helpful. 8% APR or 8% for the length of the project (about 4 months in our case)?

Hi all!

I've recently become a full-time investor and am new to Bigger Pockets. I've partnered with a deal provider that's been investing for over a decade and has always used his own money/credit lines. The deals I've done so far are with my own money as well.

My partner wholesales, flips, and also BRRRs single family and small multi-units in Chicago. He does a substantial amount of deals with his own money, but I've come on to help grow the business by connecting us with cash partners. He has four full-time GC's that only work for him, so we have sufficient workforce to do more deals. To do so, we need more capital.

I'm currently reading Raising Private Capital by Matt Faircloth, and have gotten great information from it, but I wanted to throw these questions out to the BP community as we are soon meeting with potential cash partners:

How should we structure deals with our cash partners? Our projects will be less than six months.

Do we give equity on each deal and allocate 20% of net to the cash provider?

Or should we offer an APR on their money and keep rolling profits and initial investment over into the next deal? What APR would you give? How have you structured that before?

Do we offer more if they are in second position, only providing the downpayment for the hard money loan? What are examples that you're doing?

Thank you so much in advance! Please excuse my ignorance if I've posed some of these questions and scenarios wrong. I'm learning!

- Mike 

Congrats, Michael! I've learned 100x more in the "real world" than I ever did in college. 

My advice is to continue to educate yourself on your trade, but also emotional intelligence. Also, keep the partying to a minimum. Much of my early 20's were wasted because I was hungover a lot of the time. Take care of your mind, body, and spirit. Make sure to carve out time to recharge (gym, therapy, whatever works for you) on a regular basis. 

Good luck! 

Mike