How to work with private lenders?

[Shathan McCoy]

Could someone please explain how partnerships work with a private lender? How do You get their money back to them ASAP while still netting positive cash flow.

Thanks so much in adavance.

Shathan McCoy

[Nathan Gesner]

You should read, "Raising Private Capital" by Matt Faircloth.

It all depends on how you structure the deal and what the goals are. Some investors want their money back as quickly as possible with the agreed rate of 10% or whatever. Other investors want their money sheltered from taxes and only want the monthly dividend. Most partnerships have a detailed agreement that spells out how much each investor will chip in, when they get paid, how they get paid, what percent they get paid, etc. These deals typically have an end date where you expect to sell the property and split the equity, but I suppose you could structure the deal to last forever if that's what everyone wanted.

It would really be beneficial for you to read a book on this first to get your mind around the basic concepts.