Private and Hard Money Lender Payments

[Robert Walden]

Years ago, I did several successful fix-and-flips. But, I financed the deals using my own bank account, credit cards and family loans. I never used private lenders or hard money sources. Now that I'm retired, and venturing back into real estate investing, I plan to use OPM to finance my deals. I have a fix-and-flip under contract, and am shopping for investors. However, I'm unfamiliar with either private or hard money loans. I'm not sure what I'm doing, and don't want to make a bad deal. I've been reading about these two financing methods on Bigger Pockets and elsewhere. But, the articles use a lot of terminology, without much practical ABCs and step-by-steps for how to select and structure the loan. I still have a few important questions before I settle on a funding source. Hopefully, somebody can help me figure this out so that I make the best decision.

Thanks for your help!
          :-)

Questions:

1.  What is the repayment schedule in a 100% financing deal? When are payments made to the lender, and how much?

2.  What does "interest only" mean? Does that mean you only pay the interest, and no points? Does it mean you pay the interest monthly (throughout the reno as part of your holding costs)? Can you pay it in a lump sum along with the principal at the resale, or the re-fi cash-out?

3.  I've read that some lenders allow you to roll the points into the principal. But, you'll pay interest on the points, which decreases your profit. I get that many lenders want some of the investor's skin in the game. But, if the goal is to use OPM, why would you want to put any of your own money in a deal if you can find a 100% finance lender? How do you weigh whether its better to accept fewer points (and how many fewer) for a 65-75% loan, vs. probably paying more points and higher interest for a 100% loan?

4.  How do you determine the cost of a loan over time, and how it affects profitability?