Private money between friends

[Eric Knittel]

Hi everyone,

I am interested in borrowing money from friends and family to buy more real estate. I have used hard money in the past and I am trying to see if I can eliminate some of the costs associated with the HM lenders.

• How would you structure a deal with a friend/family?

• What percent return do you offer?

• What kind of lawyer do you contact to draw up the paperwork?

Thank you,

Eric

[Arlen Chou]

@Eric Knittel I structure my deals on shorter terms, 1 year max.  Amortization rates are really up to you too.  I ask for 5% to 10% depending on the situation.  I don't use a lawyer, I write it up myself and have it notarized.  Depending on how close they are to me, I may or may not ask for points and I may or may not ask for security.  I don't lend just because they are "friends or family".  The use for the money must be sound.  I probably ask more questions then a HM because I know more then money is on the line.  If you are going to borrow from family, you better not default or Thanksgiving will suck... hahaha.