Newbie Question about private lenders

[Temie William-Olley]

Hey,

I had a question in regard to using private money or just someone else's money to purchase a property.

I am looking to purchase a rental property for buy and hold. If I am able to find a great deal (based on what the calculators say and other intangibles), would I be able to find private money to pay the down payment and  do some rehab? In such a case, how would the process or the numbers work in terms of paying the private lender back? Would I be sacrificing cash flow? What other expectations could private lenders have in order to create incentive for them?

I know this might be an investing 101 for dummies question, please help

[Tom S.]

@Temie William-Olley  Welcome to BP!

True private lenders are people you know: friends, family, etc.  The funds provided and the rate and term are whatever you can negotiate. If you're looking for buy and hold, you'll have to address how long they'll lend you the funds and what are your strategies to repay them (sell, refinance).  Most won't want to hold the note for 30 years.  Once you know the terms, then you can punch the numbers into a calculator to see if the property will cashflow.

Also look at other conventional lending options if you're willing to owner occupy; you can get in with 3.5% down.  

Good luck!

- Tom