Hey Forumites,
I'm now at a point where I have a few projects under the belt and looking at continuing expansion. I have interest from people around me to get in on a next project but I'm still struggling with the details. I would be looking at getting the person to fund the 20% deposit plus buy costs. I would fund reno costs and/or subdivision costs and secure an 80% loan over the property.
I was thinking of offering him a 20% share of overall profit and garantee him a min interest rateon the money of the deal goes sour. My timeline for deal would be 6-9 months with me either refinancing and paying him out or selling property.
Looking forward to yor input.
Regards,
QL
I'm now at a point where I have a few projects under the belt and looking at continuing expansion. I have interest from people around me to get in on a next project but I'm still struggling with the details. I would be looking at getting the person to fund the 20% deposit plus buy costs. I would fund reno costs and/or subdivision costs and secure an 80% loan over the property.
- What profit share have some of you worked to when in this situation in the past.
- I operate all my dealings through a trust- How do I borrow the money and give this person and interest in the property: 1)Do I take on a loan from person to trust and pay him interest equivalent to return offered, could then secure his interest with caveat and promisory note. 2) Enter into a partnership between him and my trust with portion share (He has some direct ownership of property)
- I think either way he will be paying tax at his marginal rate regardless of whether its paid out as capital gain or interest. He is a large income earner as it is and dont think this will be that desirable tax wise for him.
I was thinking of offering him a 20% share of overall profit and garantee him a min interest rateon the money of the deal goes sour. My timeline for deal would be 6-9 months with me either refinancing and paying him out or selling property.
Looking forward to yor input.
Regards,
QL
