Private Money Lending

[Harrison Hodson]

Hi BP!

I'm just curious how people are structuring their Private Money loans for real estate deals...

What sort of interest rates are Private Money Investors getting right now?

Is the loan for the term of the project, or for 1 year?

Is a promissory note or deed of trust provided?

Also, for equity partnerships...

Is it common for build-out labor and materials to be included in the loan?

or combination of investors' land purchase and construction loan?

How is title held in Joint Venture projects with multiple investors? (say 500k each)

This is all just out of curiosity and trying to wrap my head around how these can be structured. Thank you for any and all advice!!

Harrison

[Account Closed]

@Harrison HodsonAgree with @Antoine Martel response Just would add be sure the borrower has a clear title for the property.  

Structure a loan to fit your needs. You may find that no or low points are fine for long term loans. Whereas higher points are needed for short term loans. Length of the loan will vary. I only do one year loans with a balloon and only for the cost of the purchase. If I have experience with a builder I will loan on the construction costs. Realize I do not loan on raw land only on rehabs. You really have to do a few before making any hard and fast rules.