@Taylor Tully It will depend on each private lender. Everyone has a benchmark on what they want to get. The best thing to do is ask. But have a figure in mind. Know the market. I knew one mobile home investor who used the same private lender for over 40 deals. He made a small amount on the spread which he reinvested back into the business. The lender was paid 10% on his money. The investor got to keep the move-in fee when residents move in. Since the investor made his payments on his time on every deal, the private money lender kept funding his deals. A win-win situation for both. Hope this helps!
Most guys start with 7 to 10% and I would suggest keeping the arrangement with the investor as simple as possible. I would not split the down payments you collect from the buyers but would offer a steady return and a lien position on the title for security!
Thanks for the reply’s!
Are you saying these get paid back by amortization, or by interest only payments for a term?
I know I can give a first lien to the lender, then I hold a second lien with the end buyer.
When is the lender typically paid out and done?
@Taylor Tully - since it is private you can negotiate whatever terms are acceptable to your private lender.
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