Updated about 9 years ago on .
Finding a long term private lender
We are struggling to lower our financing costs. I would prefer to work with a commercial bank who can give commercial real estate rates, like between 3.5-5% APR. Instead, because of our portfolio of single family homes, its difficult to find institutional money for less than 6% at 70% LTV. If you go to 50-60% LTV you might get 5-6%. This is from my experience. I would like to find a stable source of financing that costs about 4-6% inclusive of fees. I'd like to find out if working with private investors would make sense for us.
Say I wanted to offer a mortgage on occupied rental properties. What rules govern my behavior as a borrower/business? Can I simply state: "Please lend me $70k on this home that is appraised for $100k, and I promise to pay you back 5% per year." Or are there restrictions?
Are there differences if I reach out to banks, to accredited investors, to the general public, or the way that I communicate? I've never thought twice about calling banks, but I've never marketed to the general public.
Am I totally "free" because I am direct borrower and providing a mortgage as security?
There are many other questions to deal with, but these are a few to start with.