I am looking at starting hostel in Central Oregon, but would need an investor for a down payment on a property. As I am new to building investor relationships, and not sure what an investor is looking for I am just laying out my thought process.
I have a property in mind, it is a house with attached apartment for me to live in while I run the hostel. The price right now is $450,000, but it has been on the market for 5+ years (unsure why, haven't dug into it yet, I am just brainstorming right now).
If someone is willing to invest $100,000 they would take on 25% ownership in the hostel an property as a silent partner. So, down the road, in say 5 or 10 years the investment would grow as the net worth of business grows and the property value increases. If the property or business is sold, or bought fully by me, The investor would get 25% of the profits at that time.
I would be making the mortgage payments, and covering all costs associated with running the hostel to maintain my 75% share.
Tell me your thoughts. I am looking for feedback from investors, people that have been invested in, and anyone else who knows their way around hostel finances.