@Christine Bruno That seems high. But you do what you've got to do. ;-)
You add the 11% to the 4 points and you wind up with 15% interest. I'd check around. Now that you have 4 projects under your belt, you could probably get 10% to 12%. The variables include to ask how much LTV they will do, what credit information if any, they might want and who does the valuation on the property. Along with do they actually perform, (some promise but never fund after they take your $500 to $5000 application fees) do they give the money to you all at once or do they split it out based on completion of the project? How quickly can they close? Do they pick up the phone when you call? Do they have a prepayment penalty?
There is more than just interest rate involved. I'd calculate what this project is costing you at 15% vs 12% - then figure how much of that comes off your taxes, which reduces your costs to borrow. The difference is your cost of funds delta - Then calculate how much time and effort it will take to find someone who will lend at 12%. Therein lies your answer. Are you saving enough to spend the time to break in a new lender? Maybe yes, maybe no.
@Christine Bruno - those rates are high, especially since you're on your 4th deal. If this is the same lender you've been dealing with they should be cutting back their fees with each deal. In building my rental portfolio up I've also built relationships with a handful of very reliable lenders. More importantly, for me and a lot of real estate investors out there they lend based on the property and not W2s and tax returns. You can be getting single digit and fewer points. Message me if you'd like to discuss.
With 4 deals under your belt, 660+ credit and 75K or higher loan amount--90% Loan to Cost, 10% rate and 2.5% cost all day long.
I also am a house flipper with 18 under my belt. Just starting to look into private lenders. I've talked with one fellow investor who said no, but I can see the advantage and would love to build a relationship with a few private investors. Trying to network on BP to see if there's any interest or how to do this on BP. Any input would be great.