Private money questions

16 Replies

I have investors that I can borrow money from. I’m trying to figure out how to pay my investor if they loan me $100k @10%. I’m going to be doing the BRRRR method so I won’t be holding the money that long. Will I pay them the 10% monthly on the 100k or at the end when I return the money? Thanks

@Willie Smith You can structure it either way. It depends on what you and your lender agree on. I would structure it so that you pay everything at the end since that would be easier for you. If the lender doesn't go for it, figure out what will work.

@Jason D. thanks for responding! If they want to get paid monthly interest payments, how would that work? $100,000 x 10% = $10,000 Do I break that down over the term of the loan say 12 months? $10,000 / 12 months = $833 monthly?
@Andy Mirza thanks for responding! If they want to get paid monthly interest payments, how would that work? $100,000 x 10% = $10,000 Do I break that down over the term of the loan say 12 months? $10,000 / 12 months = $833 monthly?

You can do it both ways, but I prefer to just make monthly payments. If you can do so, it helps put your investors minds at ease. 

Originally posted by @Ericka Williams :

Good luck @Willie Smith I am a East Carolina University alumi from North carolina currently in Austin texas. I know the market is booming in that area. Still great for buy and hold or more flipping going on lately. 

 Thanks, Go Pirates!

@Willie Smith Hi Willie. If your new to flipping the investor will probably want less favorable terms for you (such as higher interest rate and points). When you get more experience the investors feel more comfortable and charge less points and lower interest rates. Usually the investor makes the terms on their loans. As a side note...I'm currently looking for investors. Any tips on how to get a strong investor list going? Thanks, Scott
Originally posted by @Scott Robinson :
@Willie Smith

Hi Willie. If your new to flipping the investor will probably want less favorable terms for you (such as higher interest rate and points). When you get more experience the investors feel more comfortable and charge less points and lower interest rates. Usually the investor makes the terms on their loans.

As a side note...I'm currently looking for investors. Any tips on how to get a strong investor list going?

Thanks, Scott

That’s something to think about. Most of my investors are good friends from my days in the NFL and a few local doctors. Hopefully I won’t get charged points! 🙏🏾 

The best way to find investors are your local real estate clubs and attending events. Good luck!