Updated over 9 years ago on . Most recent reply
Structuring Proposal to PML
I'm looking to propose a deal to a Private Money Lender. I haven't introduced myself to them yet, and I'm wanting to make the best impression so that I have the rapport built to get his help completing the purchase of a buy and hold property. What my intention would be is secure the property for 38,000 or less from the seller using private money, then refinance the property (cash out, home equity type) pay back the PML asap for the agreed upon interest. 38,000 + 10% back to the PML in like 2 months max? is that a transactional lender? Hard Money Lender? Something I'm not sure of? I'm new to the game, so I'm not 100% on this stuff.
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@Tyson Hosey If that is your plan, then you want either PML or Hard Money Lender. They will usually give you 6-12 months to repay the loan which will be plenty of time for you to repay the PML. The HML will charge you an interest rate+ponts on top of it. So if they charge you 15% interest+3 points, they are basically charging you 18%. Transactional funding is when you do a double close or A/B-B/C close, and the money is only out for a few hours to a few days usually. You close with the seller in the morning, and close with the buyer in the afternoon. Usually the costs run about $2,000-$3,000 to borrow that money for just a few hours. Good luck.