Hey everyone new investor here. I have been reading the Bigger Pockets book on, Investing in Real Estate with Little to No Money Down, and I am wanting to understand private lending a little more. I have a few questions and if anyone could give some feedbacks or even better have short stories of their experiences I would be glad to hear them. Thanks everyone in advance!
1. Have you partnered up with family/friends to fund real estate deals? If so, how was your experience? Would you do it again?
2. If you have partnered with family/friends how did you structure the agreement?
3. Have you combined private money and hard money to fund a deal? What was that like?
4. Did you have any bad experiences, where an investment gone wrong when using private or hard money? How were you able to combat the situation?
Thanks again everyone for you insight!
I have a sibling who was awarded a large sum of money in a lawsuit. She agreed to lend me money in exchange for half of any deal, restricted to house flipping. She has said she will assume the risk if any flip is to fail, but I would not return her a negative sum. Instead, I would eat all the losses.
If you can show a friend or family member consistent prudence, a track record of success, and an incentive for lending, they will give you absurdly good deals, in my experience, and that said, I would be extremely cautious doing a buy-and-hold with a family member or friend because of the potential for strained relations.
Thanks @Jody Sperling I was thinking the same when it comes to buy and hold properties and looking to use private funding strictly for flips only. Thanks again for your advice it was helpful.
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