All Forum Posts by: Yonathan Cabrera

Quote from @Stuart Udis:

Jay is right, this is generally going to be a fit for the family members who love you the most. The PG is worth as much as the paper its written on. I also question how investors get away with using gap funding. I would imagine most misrepresent their sources and uses when they apply for their financing. I know if I were to send an operating agreement to a lender that reads "LP member will receive return of their capital and 20% annualized return" they would not approve the loan. If it were to read LP member owns XYZ% and will receive a certain percentage of proceeds based on property performance, that's a different story. Preferred returns would even be acceptable but not a straight interest rate play if the lender understands the structure. 

I’m understanding the logic behind not having a certain sense of security and that the borrower (the GC) should reach out to those close to him. 

it’s exactly that, though. He has no one “close” to him willing to do so. 

But I guess an investor must be willing to sit down as we go over the three ways to protect the money they put in… 
just stumped is all I’m saying. 

thanks for the insight!! 

Hi there, name’s Yonathan (per my profile…) 

I am trying to gain insight on the best strategies to pinpointing investors/lenders that are able to do secure gap funds. 

I have a GC friend in PA trying to request 196k, as a "gap" to supplement whatever the HML cannot cover. 20% ROI, 6 months.
It is secured with
 👇

Controlled Interest: We include our investors as a 51% controlling interest member on the borrower’s operating agreement. This gives them significant control and security.

Joint Venture Agreement with Personal Guarantee: We establish a Joint Venture (JV) agreement that includes a personal guarantee, providing an additional layer of security for our investors.

Memorandum Filing: We file a memorandum in the county where the property is located. This ensures that when the borrower exits, the title company is aware of the JV agreement, further protecting the investor's interests.

I’m just blown away at how hard it is to find people to do this since it quite honestly is a solid deal with the ins-and-outs planned out already. 

Tips?