What’s Your Ideal Structure for Private Money in New Construction?

[Anthony Rivera]

Hey everyone,

I’m a residential builder and licensed Realtor in North Carolina, working mainly around Raleigh and surrounding areas. Most of my projects are infill lots, small subdivisions, and unique rural or lake community builds — typically priced between $200K and $1M.

Over the last few years, I’ve been structuring deals with private lenders in a couple of different ways — flat annualized interest or profit-sharing/equity splits — depending on the project type and timeline.

For those of you who lend privately or borrow from private lenders:

• What’s your preferred loan term and structure?

• Do you like a fixed return, profit share, or a hybrid?

• How do you weigh risk vs. reward on ground-up construction?

I’ve got a few upcoming new builds ready to go (permits in hand and budgets locked in), and I’m curious to hear what works best for you before I finalize the next round of funding agreements.

Would love to hear your thoughts — both from the lender and borrower perspective.