How much should a private lender charge?

[Eric Schalk]

I'm going in on a flip with a friend and we're borrowing all the capital from her dad. Probably about $120,000 all together. What's a fair return we should pay him or what's fair for him to charge? Sorry I'm sure this is around somewhere, but hopefully we'll be under contract tomorrow and this is most pressing right now moving forward. THANK YOU!!!

[Darren Eady]

I would assume her dad would be happy with 12% with no points.  I sell mortgage notes all the time that pay 12% annually and have tested the waters with many other rates to end up at 12% again and again.  This is the number that seems to work for the borrower and the noteholder that buys the note.