Private lending from family to build private lending history

[Jeff Piscioniere]

My business partners and I are looking to scale as quickly as possible on a buy and hold rental strategy. For purposes of using as little of our own money as possible we naturally want to use other people’s money. Together we could all probably cobble together family members to lend us money sufficient for down payments in our price range. That money we could probably just borrow and pay back through family trust but my question is,does it make sense, even though not needing to make it an official legal loan, should we have the loan legally drawn up by an attorney with an interest rate and amortization schedule in order to establish a private loan history for the purpose of demonstrating to future private lenders who are not family members that we met loan obligations? Thank you in advance!

[Kathie Riedel]

Whether you need an attorney or not may be questioned but definitely put your agreement in writing. If this is your first attempt at using OPM for the down payment or loan use an attorney.