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Deal structuring is the name of the game in real estate investing today. What real estate investor, hard money lender, and expert house flipper Beau Eckstein sees in the construction world is a contractor who needs funding.
Typically, you have a contractor, a money partner, and a hard money construction lender in the mix. Private money lenders want to see skin in the game and that's where the money partner or real estate investor comes in. A private money lender also wants to have on board a top-flight contractor who can get the job done, on time and on budget.
Usually, an investor needs to put down at least 10 percent of the total deal. The contractor and investor negotiate a profit split.
Sometimes, this money comes from a self-directed IRA.
In any event, there are lots of ways to structure deals for these types of construction, or rehab, projects.