Credit Partner Structured Deals? - Posted by Peter

Posted by John Merchant on May 14, 2007 at 09:00:36:

I’ve assisted a number of REIs in their finding funds for their deals.

Several I recall have used this kind of formula:

Money partner (MP) puts up all money and at sales time gets back his $$$ plus 12% per year on his money plus half of remaining profits.

Title is taken by a new LLC which the MP and the REI both own, and they have specific written Operating Agreement and Articles of the LLC spelling out who is the manager and real decision maker, who does the foot/grunt work, what’s to be done, etc.

A lawyer should be involved in forming the new LLC and working with its owners to get their operating agreement just the way all unit owners want it so as to avoid future arguments and fights.

In my experience the big law firms frequently have a Corporate Section whose lawyers do this kind of thing daily and for competitive fees.

Credit Partner Structured Deals? - Posted by Peter

Posted by Peter on May 09, 2007 at 18:39:32:

Question for those that use credit partners to buy properties and assign you interest in the property for you to then L/O to a T/B. The credit partner would act like a silent partner for passive income.

What are good ways to structure a deal to use credit partners for financial backing to buy the property in their name and you act as the project manager to lease option the property to a T/B?

Who is responsible for the mortgage, payments and maintenace ?

How is the credit partner paid? By percentage of the total money that he put out in the deal?

Percentage of profits from the L/O?..ex. 50%/50%