Private Lending - What should they get in return with 500k loan?

3 Replies

Hi guys,

I have a seller that is looking to sell his rental portfolio-

Its a turn key 9 building multi property portfolio consists of 6 single family, 2 multi unit and 1 large commercial property (13 total units). Total taxes on package $13,703. Total gross rental income is $136,320. Total insurance costs approx $6,000/yr. 23% Return on investment ! Professional property management services available! - That was what he sent me to purchase for 500k.

Now I am Looking for a private lender for the 500k. 

I wanted to know when meeting with Private lenders what the numbers they would want to see on the loan? 6-8%  or higher for 3-5 years?

How much % on rent each month would they want to see?

To than refi the property in 3-5 years to get their money back.

I guess for me when approaching to have a plan in place and that I don't look that I have no clue what to give the lender as a reasonable offer and return on their investment.

Do you have experience with private lenders already or not? Do you already own real estate or is this your first deal?

If you’re new or don’t own much real estate your interest rate will likely be in the 10-12 percent range or higher. Not to mention they’ll likely want you to have skin in the game

I used a bank to fund my first single family to fix and hold. And now just l am going to get private funding...

@Matthew Yorgey - If I understand correctly the purchase price of portfolio is $500K?  With the numbers you mentioned I would suspect the deal and spend more time to understand the market , area and why he is selling.

Good Luck


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