How is private money typically replaced at the end of the term?

[Sean Dezoysa]

Hi, I understand that most private lenders want to lend for no longer than 5 years. With this in mind, do investors who use private money need to continually find new private money to act as a replacement? Or are banks generally willing to refinance (even to an investor with 50+ low equity properties)?

[Aaron Mazzrillo]

if you have 50+ properties you should have your financing figured out by now, no?

Private lenders sometimes extend. If they want to be paid back, you can do so with cash or other financing - preferably another private lender, or the equity is harvested by selling the asset. You could also sell a lesser quality asset to pay down financing on the better quality one. My favorite is to secure great seller financing on a total piece of turd property and then walk that to another property I want to keep.