Silent investors have flexible options depending on how hands-off or profit-maximized they want to be:
1. Private Lending / Debt Investor
- What it is: You provide a loan to the active investor and earn interest (secured by property or collateral).
- Benefits: Fixed return, lower risk, first-position lien options.
- Ideal For: Conservative investors seeking predictable income.
2. Equity Partner
- What it is: You contribute capital in exchange for a share of profits or property appreciation.
- Benefits: Higher upside potential, shared equity growth.
- Ideal For: Growth-oriented investors who are open to variable outcomes.
3. Preferred Equity / Hybrid Structure
- What it is: You receive a fixed preferred return plus a smaller percentage of profits after the active investor’s work is complete.
- Benefits: Balanced risk/reward, flexible negotiation.
- Ideal For: Investors who want better returns than debt, but less risk than full equity.
4. Profit-Sharing Agreement
- What it is: No equity or loan—just a share of the net profits on exit.
- Benefits: Simple contract, no ownership, performance-driven payout.
- Ideal For: Those who want to test waters without heavy commitment.
5. Convertible Note
- What it is: You lend capital, but with the option to convert to equity if the project meets certain benchmarks.
- Benefits: Flexibility to adapt mid-project.
- Ideal For: Investors interested in controlling downside with upside potential.