Offered Yield On A Note
If anyone is willing to share... what do you offer private investors. I'd like to move past family and friends. I was thinking of an annual rate of 12% for loans in the amount of $10-39,999.99k and 15% for loans above $40k.
I usually do a balloon payment on the sale of a particular property, they have the option to reinvest on another property.
As always you need to be careful when taking private investors that you don't run into securities violations.
That said, I'd take all those investors I could find. My private investors typically want a piece of the action. Usually the deal we strike goes something like this: 10% preferred (i.e. before I take any money) and above that we split. Sometimes I insist on some fees to sorta off-set the 10% and then we fight about how to do the split.
On the other hand my deals tend to be somewhat larger. In the current transaction I am negotiating with private investors who will put up $700,000. They want the 10% and half the deal.
I am putting together a pool to do some investing in the aftermath of Hurricane Charley. In that case I'm probably willing to take small investors ($10,000 to $50,000). I think I'm going to do the split the same way 10% preferred to the investors and 50% of the profits above that. I'm sure there will be some fees to me in the front end of the deal.
Hi CommercialKing,
I am new to this. Let's say you do a 10/50% as described and your net profit is $200k. Do you take out $20k [10%] for you then split the $180k[50-50]? You get 20+90 {110k] and your investor gets $90? sorry, just trying to get a handle on this...