Incentivizing a Lender

[Paul Levine]

Good Morning BiggerPockets! I'm just starting to take action to get into real estate investing. I'm looking to start with house-hacking into the BRRRR method but I have a question about finding private money.

What is a way to incentivize a private money lender into helping fund a BRRRR deal when you’re looking to keep the property long-term? (For example, if you flip a deal for a profit within a year, you can pay your lenders back in entirety with interest after that year, but I don’t believe I would see even cash-flow until at least the beginning of year two)

Any advice, stories, or questions would be welcomed and appreciated! 

[Chris Seveney]

@Paul Levine

Best way to incentivize a private money lender is by putting a significant amount of money down. We look to protect our investment first, so either a track record and or a significant down payment is always very beneficial. If the borrower also provides profit upside that could alter certain components of the deal such as potentially a lower interest rate