Encourages Larger Investments: By offering higher returns at higher tiers, you incentivize investors to allocate more capital to your projects.Builds Long-Term Relationships: Investors appreciate being rewarded for deeper commitments, which helps foster trust and repeat business.Scales with Your Business: This structure can align with the complexity or scale of your projects, ensuring that you have the resources you need while staying competitive in the market.Key Benefits to InvestorsSecurity: Deals can be secured by tangible assets, such as a deed of trust or promissory note, providing peace of mind.Flexibility: Payments can be structured to suit the investor’s needs—monthly, quarterly, or upon project completion.Attractive Returns: With returns starting at 15%, investors often see better yields than traditional investment vehicles, like stocks or mutual funds.How We’ve Implemented ThisThis structure works particularly well for our large renovation or development projects where multiple investors may be involved.

Down PaymentSaving for your down payment is likely top of mind.

I simply went to Wells Fargo (Wachovia at the time) and asked for a trust account so I could hold deposits.

Is it foolish to consider using the HELOC for the down payment?

I’ve done some research and have found that some banks will allow the seller finance portion from the seller to go towards the down payment of the loan, is that true?

In this type of situation, they want low interest rate with low down payment also.

I have a large lump sum saved in an investment account for down-payment and any additional costs.

In this case, since they are borrowing their payments, these would get added to the principal balance each month, and interest would be calculated on that.If, for example, the interest rate on the note were 10%, they would implicitly be borrowing their payments at that rate.

Have you considered tapping into your existing rental equity for the down payment?

The seller would need to include a clause saying what you CAN'T do, which is what a pre-payment penalty would address.