For those in Private Money

[Nick DiSanza]

Quick question for people actually doing deals.

If you’re using private money right now, how’s it going compared to last year?
Anything getting harder than expected, or anything working better than you thought?

Just curious what people are seeing on real deals.

[Richard Bautista]

Quote from @Kenneth Garrett:

I'm a BRRRR investor and have been using private money for years. The underwriting on the deals is the hardest part. The money is available, but when you are conducting a substantial rehab, time in this economy can be tough.

You run your numbers and by the time you are ready to refinance your appraisal of the property may be down. Let's say you bought at 225K, rehab 40K, ARV 350K that's 75% of your money. Its tight. I generally get 80% LTV. What if the market shifts? Just a small 3% adjustment is 10K. You need to have funds available for any shortfalls. Rents are still great. That's not the issue.

What I try to do is protect my private lender and stay in the great relationship, even if it cost me money. I treat it as it were my grandmothers money.

Have you had the same private money lenders all these years?