Does this sound like a good loan

Question

I am going to be buy a property using a private lender, we agreed agreed to 20% down payment, he’s covering 100% of the purchase price and the rehab, with 15% does this sound like a bad deal it’s my first property.

Nicholas Andrews · Answer

@Anthony Capaldi

Mate 10% interest from a private lender in a deal you have little skin in, and what’s potentially your first deal, is sensational! If he wants to lend more money send him my way! Haha

Anthony Capaldi · Answer

@Stephanie P. Thank you for the advice and yes i don’t plan to rush into anything that’s isn’t a solid deal

Stephanie P. · Answer

@Anthony Capaldi

The best advice I could give you would be simply this; Know that it's okay to walk away from a deal if the numbers don't work.  You have to buy it right or the rest won't matter.

Best of luck

Frank Geiger · Answer

You agreed to a 20% DP but he is covering 100% of the purchase and rehab? That is contradicting. Do you have a personal relationship with this person or did you find them on a website? If they are a "professional" private lender, this is normal. If you have no skin in the game, I would say 15% is reasonable.

Michael Ealy · Answer

The loan seems to be good. How good is the deal itself? Purchase price, repairs, and how much are you going to sell it once it's renovated?

Anthony Capaldi · Answer

@Jaron Walling so you think it doesn’t sound like a bad deal

Anthony Capaldi · Answer

@Stephanie P. Still looking for the right on and also want to come up with some more capital for the DP

Anthony Capaldi · Answer

@Michael Ealy still on the hunt for the right

Anthony Capaldi · Answer

@Joshua Watts working on my first one

Stephanie P. · Answer

Anthony,

Let me get this straight because you've got some contradictions

• You have a private lender who has agreed to cover 100% of the purchase price and the rehab
• They're charging you 10% interest
• You don't have to make a payment until you're into the deal for 2 months
• It's your first deal

Are they covering the closing costs too?  In for a penny, in for a pound I always say.:)

Yes, it's a great deal.  You should leap on it and then find some more.  Are they going to be on title with you also or is the profit from the sale yours and have you had your agent run the final numbers to make sure your renovation doesn't go over budget?

Does this sound like a good loan

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