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Updated over 6 years ago on . Most recent reply

User Stats

4
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Alex Arkhangelskiy
  • Flipper/Rehabber
  • Littleton, CO
0
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4
Posts

How do I structure a Private Money Loan for my first flip?

Alex Arkhangelskiy
  • Flipper/Rehabber
  • Littleton, CO
Posted

Hello,

I'm working on putting together my first Fix&Flip deal. I have a good friend who wants to invest into the flip and agreed to provide all the funding needed for purchasing a property using a hard money loan (10% + 2pts) and provide all the rehab funds needed plus holding costs. Hard money lender wants 10% of the purchase price to come from my side, and will credit it back to me when he sees progress on the flip after a month. My friend would provide the 10% of purchase price and finance all the rehab costs. 

He is giving me the money as a loan at 13% simple annual interest. He'll get paid back after the project is completed.


My question is, how do I structure an agreement with my friend for what we're trying to do? 
I would like to secure my friend's loan with a lien on the property in 2nd position. What do I do to do that?

Do you have a template I can use for any of the agreements I may need to structure this?


I know there were similar posts to mine before, but I wanted to ask for advice that's specific to my situation.

Any and all feedback is very much welcome and appreciated!

Thank you very much for your advice in advance!

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