Hi guys,
Now, right up front, I'm NOT advertising for money partners.
I'm aware that's a real "no-no" as part of forum etiquette.I'm just wondering, when you guys use money partners or approach them, what's a reasonable interest rate to offer them?
And, with rates going over the last 12 months, and possibly going to go up further later in the year, do I need to offer a higher rate?
Is there a "standard rate" or do people use a "set margin about current standard variable interest rate"?Also, do any of you know a good contract/agreement I can use with a money partner?
Thanks,
Peter
Great question Peter.
I haven't used such financing however your term of "money partner" probably needs clarifying.
Do you mean a formal partner in a project or investment, where say they provide funds and you provide the leg work or sweat equity.?
Or funds used as seed capital (deposits) to gear up to a larger loan thru more traditional lenders?
As far as interest rates if it's the latter, it is similar to mezzanine lending which would attract maybe 20-25 % interest. If its the former the money partner would not receive any interest as they are a "partner" and invested their cash/equity in return for a profit at the end, whilst you have invested the leg work so to speak.
At the end of the day, there are no rules when it comes to creative financing.
You need a competent property solicitor to discuss your ideas with and to provide a heads of agreement and subsequent contract.
If anyone on the forum has been involved in such deals, please share so we can all learn.
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