Updated 10 months ago on . Most recent reply
Always Be Open to Be Creative
One of my favorite parts of the business is the ability to be creative. Just finalized a raise of about $3MM in capital through a Private Lender, who also happens to be one of the partners at the Lending Firm I work at, and the terms that we negotiated are an absolute win - win. The basics are:
1. Lender gets 10% annualized as a base
2. Lender gets 1% of purchase when I sell the property on wholesale deals. In other words, on the back end. About once per quarter, I will cherry pick a nice fix and flip, and will pay the lender 25% of the net profit when I sell. At the end of the day, the Private Lender is making nice ROI on his money, and I am making profits with ZERO out of pocket. Win win!
What's my point? The point is when dealing with Private Lenders, you can be as creative as you and the other party agree to!