Private Lender Terms

[Julie Yarnall]

When partnering with private lenders, what terms or expectations do you set upfront to keep the relationship strong?

[Sher M]

Hi @Julie Yarnall,

I’m both a recipient of private money and a private lender myself, so I’ve been on both sides of the equation.

I agree with @Frankie Vozzi — clarity, communicaiton, clear expectations and risk mitigation are the foundation of a strong long-term relationship.

When I’m the borrower, I lay out the key terms right away: the loan amount, the rate, the term, and whether it’s amortized or interest-only. From there, I make sure the structure is clean and safe for both sides. Here’s what I usually do:
• Put the lender in first position
• Add them as a mortgagee/additional insured on the insurance policy
• Execute a clear promissory note
• Use a title company so everything is handled securely and recorded properly

Once the loan is funded, I also provide monthly reports so the lender always knows the status of the property, payments, and performance. That transparency builds trust and keeps communication strong.

Hope that helps! I’m always happy to share my experience or compare notes. Feel free to DM me.