First private money loan terms

[Jack Gowan]

Hi,

I am new to the bigger pockets community and have found someone that is willing to loan us money based on these terms:

Loan Amount: $1,000,000.00

Loan Duration: 20 years. 

Type of Repayment: Interest Only Monthly Payment

Interest Rate: 5%

Total Interest: $1,000,000.00

Monthly Interest Payments: $4,170.00

Cumulative payment:$2,000,000.00

Number of payment:240

Note: Only the interest is allowed to be paid 240 times of $4,170.00 monthly and the principal (Loan Amount) of $1,000,000.00 can be paid off at the end of your loan duration (240 months). You can also make repayments above $4,170.00 monthly if you wish so as to enable you to pay off the interest ($1,000,000.00) and principal ($1,000,000.00) before the end of your loan duration of 20 years. Kindly confirm if you are in agreement with the above repayment statements before we can proceed any further.

If someone has experience with a loan like this, please let me know what you think about this whether it's a good idea or not for being our first rental property. The loan amount is 1 million but can adjust it based on the deal that we find. This appears to look good to help us get our foot in the door of this industry and help us acquire our first deal. If someone could say what net income per month would be necessary to not make this sort of deal too risky that would be great. Just let me know what your thoughts on this are.

Thanks.