Hi, guys. First time posting. This is a rate of return on private investment question. I have three doors in Nova Scotia, and as of today have an offer in on another house. I have two friends who are willing to invest some, and if I ask them each for half the worth of a down payment, so I don't pay anything down myself (except for closing costs) but I assume the mortgage... what is a good rate of return for them in 1 -3 years? I've seen 6-16... is that right? I intend to move to this house, so the deal is not a flip or a pure investment (which would be easier). The only up side to them would be a straight return for 1 to 3 years. (At which point I'd refinance to pay them out. 35k each. 10%? Per year?) Any tips on this would be terrific. Doing a lot of research but it's the first time I'm using other people's money -- potentially. I'm discussing the situation with my mortgage broker tomorrow, as well. Thank you!
I’d give them a share of equity ie value upside and mortgage pay down.
You can’t use other people’s money to get a mortgage. You can add it after the fact though, say as a second mortgage.
I’d say 8-9%/yr is reasonable but the risk is you can’t pay them on a refi. Then what? What’s the security ? A mortgage? A prom note?
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You can’t use other people’s money to get a mortgage. You can add it after the fact though, say as a second mortgage.
I’d say 8-9%/yr is reasonable but the risk is you can’t pay them on a refi. Then what? What’s the security ? A mortgage? A prom note?
Sent from my iPhone using myREINspace