Business Owner Has Money To Invest... - Posted by Mr-Codes

Posted by John Merchant on September 18, 2004 at 11:43:33:

I’d suggest you approach this question by considering, and having him consider, what he thinks would be a reasonable return on his money.

On a similar deal I’ve just recently entered, the money partner agreed to:

  1. His money back our of first income
  2. 12% per annum on his money invested
  3. Equal split of remaining profits.
  4. I would (and did) incorporate a new LLC for him and draft its operating agreement.
  5. His LLC is in title on the property so he’s really in control of what, when, things happen on the property and he doesn’t have to worry about trusting me, but vice versa.

Just don’t settle for too little yourself, as you’re going to be putting out considerable effort and skill in making the deals happen and work, and once your percentage is settled, you can not easily increase it.

And please, have a lawyer do a good business partnership agreement in writing for you, as lots of p’ships do tank and fall apart, often because p’s can’t agree on what they did agree on, etc.

Good luck.

John Merchant

Business Owner Has Money To Invest… - Posted by Mr-Codes

Posted by Mr-Codes on September 17, 2004 at 15:38:58:

We have found a business owner who has a large amount of money that he wants to invest in residential RE. I’m looking for suggestions as to what would be the the best way to use his money for investments? We were looking into residential rehabs, and quick turn single family houses, maybe even seasonal properties and land. Investor will put up the funds, and we will do all the work. No split was agreeded on to date. What would be a decent profit split? What are some good suggestions?


You also got to consider . . . - Posted by Gregory (VA)

Posted by Gregory (VA) on September 20, 2004 at 14:47:41:

You also need to consider the cost of funds. If you can get a a Hard Money Loan for several points and 18% interest, why pay someone else 12-15% interest and 1/2 of the profit?

Make sure your borrowing method makes sense for you.

Re: Business Owner Has Money To Invest… - Posted by Tony in New Jersey

Posted by Tony in New Jersey on September 20, 2004 at 09:25:49:

I have a deal with my brother-in-law for residential rehabs. He finds them and does all the work. I supply all the funds to buy and fix them. I get 12% on my money and 1/2 the profits.

So far, we’ve done two deals and they worked out well for both of us.

Good luck.