Good evening, I have a question about private money and a possible rental property.
Excuse the possible noob question... If I acquired a property using PM and I turned it into a rental property. How would I pay my private lender back? Would it be every month or a lump sum after the end of a set date? or Private lenders dont lend out to acquire rental properties.
Thanks all for any information if wanting to add any addition information that would be awesome. I am trying to understand this a bit better.
Balloons can be attractive to get a property paid off quickly but im a fan of PM interest only loans to finance buying and the renovation process. Then refinance to a conventional loan for the duration of the holding process.
@Al C. Didn't the lender provide you with the terms of paying them back BEFORE they gave you the money, including information like the interest rate you're paying, etc.?
These are things that I would want to know before I ever agreed to take a loan because it would have a serious impact on my ability to run a profitable property. Not having this information could lead to confusion between the two of you and having a day in court because of disagreement. I hope it turns out well for you. Get it all in writing ASAP.
I assume you have not yet done a deal with private money. These are all things you will want to work out with your potential lender. All things in RE are negotiable. You may find 3 lenders who want to do the deal 3 different ways.
@Darren Sager Thank for for the valuable information. At the moment have not set any terms. Will keep in mind in the future.
@James Wise I have not worked with a private lender before. I am looking to ask my father in-law for the money but I want to treat it as a private lender and keep it business professional. The main thing for me would paying him his money back and well looks like I first have to ask how soon would he want he cash back?
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