My brother and I are new to the biggerpockets world, and we're glad to be here.
I have a quick question. In the instance that someone uses private money to fund the down payment on a multi-family property, how would the private money lender get their return on investment? Do you allocate a certain percentage of the cash flow from rent towards paying them back? Hope to hear back from you guys. Thank you!
Investor · Miami, FL · Member since 2015 · 379 posts · 330 votes
6y
Hey Roberto!
Typically a private money loan is exchanged for a note on the property. This note entitles the investor to a monthly payment. Most of the loans I've done have been interest only payments ranging anywhere from 10-12% with the full loan balance due in a year. Just to give you an example.
Feel free to ask more questions regarding this topic at tomorrow's event. See you there!