Setting up long term private lending

[Tylor Petkovich]

Hey everyone! I have several private lenders that are ready to go once I find a deal that works, but I’m trying to figure out the best way to structure the deal. Since this is going to be a buy and hold, I want a long term loan from my lender. Any suggestions? Thank you!!

[Beth Johnson]

@Tylor Petkovich

The challenge with most truly private lenders is that we want to balance rate of return with liquidity. You want as low a rate as possible with longer terms while a private lender is looking to beat the market yield. So if you want anything longer than a year or two, your private lenders may scoff at low to mid single digits when they know they could get better returns lending out on bridge loan terms at a higher interest rate and shorter terms less then a year.

I'm curious why you'd want longer terms with your PML rather than simply refinancing or funding a majority of the purchase with a conventional or DSCR loan instead?