Asking for money from a private lender

4 Replies

When approaching a private lender what is a fair rate of return back to that person? I have never used a private lender but have developed a relationship with this person. They have offered in the past, but have never used them. Is a 15% return on their money bad, good, or fair?

@Patrick Stager this depends on a lot of variables. 15% ROI can be great over a couple months but not necessarily 2 years, 3 years, etc.

Here’s some questions that come to mind:

- What strategy are you using?

- What is the hold time?

- How risky is the project?

- Is this person funding 100% of the project?

A 15% return sounds great to one person and bad to another. Before throwing out the number that you think, just ask them what type of return they are looking to get on their money.

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@Colton Fairchild It be a year or less on the return. This is actually a land purpose that already has appreciation. They are 15% under market evaluation on the property. This is a off-market find.