Private money lending

9 Replies

What do you guys think about using only private money lenders for financing especially when buying my first few properties

@Dovi Zagelbaum , fully financed, all in with no money out of your own pocket will be a difficult trick to pull off on your first deal.  Even experienced syndicators put their own money into their deals.  Most investors like to see the operators having some skin in the game.  That being said, based on price point, you may be able to do it.  

You could potentially get a commercial loan for 70%, a mezzanine loan for 20% and the remaining 10% investors, but the investors will most likely all need to be on the loan, unless your willing to make a personal guaranty on the loan.

@Dovi Zagelbaum , it's essentially a second loan with a higher rate (I've typically seen 8%).  They usually have an agreement with the main lender for foreclosure processes.  Investopedia has a great explanation on it. https://www.investopedia.com/terms/m/mezzaninefinancing.asp#:~:text=Mezzanine%20loans%20are%20subordinate%20to,fixed%20and%20part%20variable%20interest.