Looks like I may have my first private lender
Hey BP,
A friend of mine wants to invest some money with me. He's looking at about $25k and looking for 8.5%. No time frame or terms have been nailed down yet. Anyway, the idea to start will be that I buy a house for right around $75k. I put in $50k from a HELOC and he puts in the $25k. He'd be in first lien position. He sent me an email today and asked a couple questions I kind of know the answer to, but just wanted to see if somebody could spell it out for me in a way that both HE & I will understand. I do currently have some traditional financing in the works at a much better rate, but, and correct me if I'm wrong, that may dry up at some point and I think it's a good idea to start building relationships with folks like this. Basically, could you just how the money works. I'm assuming he'd bring a check made out to the title company to the closing. Also, how does the recording of the agreement go or what's involved in that. I know title companies do it all the time, I'm just looking for a simple explanation, I guess. As always, thanks in advance for the invaluable advice.