What is a Common Way that Real Estate Investors Are Putting Together Large Construction Projects?

Deal structuring is the whole name of the game in real estate investing and construction world

This is because usually it’s a contractor/developer type person who has found a property and they just need the money now

Here are some typical deal structure

You’ll see a contractor and he’ll usually have a money partner and then they’ll be on our end the construction loan

We structure deals like that is we’d like to typically see at least ten percent of an investor’s funds in the deal

Example:

So if it’s a purchase price of a million dollars we want to see a hundred grand of their own money in the deal no matter whatSo usually it could be a contractor with no money in the deal, he’s got a partner who puts up the hundred grand and they have some kind of split between themIt may be a fifty/fifty, it could be a sixty/forty.And then the difference after they pay off their loan is their net profit and it gets split accordingly

Here are some typical deal structure

Money could come from somebody’s self-directed IRA which is another great way of working with hard money

You can also get that secondary financing or that secondary flux of money coming into the deal from someone’s self-directed IRA