How to Find Private Money/Structure Terms and contracts

Private Lending & Conventional Mortgage Advice

How to Find Private Money/Structure Terms and contracts

Investor · Columbus, OH · Member since 2020 · 9 posts · 6 votes

I am looking to expand my portfolio, but am short on funds and want to start using other peoples money. Where/who can I go to for down payment and reserves to qualify for hard money and DSCR loans. And once financing is secured how are contracts written or are LLCs created for each partnership with % ownership. Just trying to learn how involving partners is done.

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Chris SeveneyBusiness Member
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Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
3y
Quote from @Chris Thomas:

I am looking to expand my portfolio, but am short on funds and want to start using other peoples money. Where/who can I go to for down payment and reserves to qualify for hard money and DSCR loans. And once financing is secured how are contracts written or are LLCs created for each partnership with % ownership. Just trying to learn how involving partners is done.
Have you ever done a deal? IF so, does your current portfolio have equity? Getting down payment reserves does not exist. Personally if you have no money, you have no business buying real estate. Majority of people who get into real estate with no money and no way of earning it on their own end up in a very bad spot. Not meant to be harsh, meant to be real that most who think real estate is easy and money grows on trees who have never saved money should not be in this business.
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Chris Thomas
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Investor · Columbus, OH · Member since 2020 · 9 posts · 6 votes
3y
Quote from @Chris Seveney:

Quote from @Chris Thomas:

I am looking to expand my portfolio, but am short on funds and want to start using other peoples money. Where/who can I go to for down payment and reserves to qualify for hard money and DSCR loans. And once financing is secured how are contracts written or are LLCs created for each partnership with % ownership. Just trying to learn how involving partners is done.
Have you ever done a deal? IF so, does your current portfolio have equity? Getting down payment reserves does not exist. Personally if you have no money, you have no business buying real estate. Majority of people who get into real estate with no money and no way of earning it on their own end up in a very bad spot. Not meant to be harsh, meant to be real that most who think real estate is easy and money grows on trees who have never saved money should not be in this business.
Thank you for the reply, yes I have done a deal and yes I have equity. My seasoning period is not up until April 2024, so I am looking for options to raise capital for down payments/reserves and get into more properties before then. Is it not common to raise money for down payment and reserves from someone when I bring the deal to the table?
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Chris SeveneyBusiness Member
Moderator
Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
3y
Quote from @Chris Thomas:

Quote from @Chris Seveney:

Quote from @Chris Thomas:

I am looking to expand my portfolio, but am short on funds and want to start using other peoples money. Where/who can I go to for down payment and reserves to qualify for hard money and DSCR loans. And once financing is secured how are contracts written or are LLCs created for each partnership with % ownership. Just trying to learn how involving partners is done.
Have you ever done a deal? IF so, does your current portfolio have equity? Getting down payment reserves does not exist. Personally if you have no money, you have no business buying real estate. Majority of people who get into real estate with no money and no way of earning it on their own end up in a very bad spot. Not meant to be harsh, meant to be real that most who think real estate is easy and money grows on trees who have never saved money should not be in this business.
Thank you for the reply, yes I have done a deal and yes I have equity. My seasoning period is not up until April 2024, so I am looking for options to raise capital for down payments/reserves and get into more properties before then. Is it not common to raise money for down payment and reserves from someone when I bring the deal to the table?

If you make them an equity partner, there is the possibility there but they will want 50-80% of the deal.
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Dennis Muno
Lender · Denton, TX · Member since 2023 · 349 posts · 80 votes
3y
Quote from @Chris Thomas:

I am looking to expand my portfolio, but am short on funds and want to start using other peoples money. Where/who can I go to for down payment and reserves to qualify for hard money and DSCR loans. And once financing is secured how are contracts written or are LLCs created for each partnership with % ownership. Just trying to learn how involving partners is done.
Hello Chris,
So you'll need to find a private money lender to work with. Your terms and contract details will very from private lender to private lender.
Also, the type of project you want to do, your FICO, experience, length of project, etc will factor into the rate and terms every private lender is willing to give you.
So for loans like this, there's usually a guarantor. Sometimes some lenders require anyone in the LLC with 20% + membership to be part of the application.

Terms, conditions, requirements will vary from private lender to private lender.

Thanks!
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Erik EstradaBusiness Member
Lender · Member since 2022 · 6k+ posts · 1k+ votes
3y
Why not do a cash out, cross-collateral, or HELOC on your existing properties?
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