How Does Private Money Work With Buy & Hold Real Estate?

How Does Private Money Work With Buy & Hold Real Estate?

Member since 2017 · 18 posts · 0 votes

I've watched a few Biggerpockets videos and podcasts and have heard of many people using private money for real estate deals. When looking at private money loans, I see a lot of people using them for flips and not buy and hold. I know what private money is so thankfully I don't need an explanation. However I could use an explanation as to how private money loans are structured for buy and hold. What is the typical interest rate, loan term, etc.? I can get clear answers to how fix and flips work with private money but can't get good answers for buy and hold to save my life.

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  • Kenneth GarrettPro Member
    Investor · Florida Panhandle/Illinois · Member since 2016 · 4k+ posts · 3k+ votes
    6y

    @Nathan Walden

    Unless your getting a family/friend discount on an interest rate 6% or less private money doesn't really work for buy n holds. If your giving up some of the ownership like 50% and you'll both split the cash flow then it could make sense. It's usually designed for short term loans such as flips and BRRRR strategy less then 12 months.

  • Member since 2017 · 18 posts · 0 votes
    6y

    @Kenneth Garrett Seems like the buy and holds are the result of successful BRRRR deals then. Thanks for your input!

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