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.

Comments(2)

  • commercialking17th August, 2004

    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.

  • pushcart17th August, 2004

    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...

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