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Updated almost 3 years ago,
Private lender newbie - tons of questions
I have been asked to go in on a deal as a private lender. I have met the real estate investor face to face and he has had lots of success in the last 2 years since he started his business (40 doors/10 completed flips/wholesales). I know nothing about private lending and would like to know more about the process. This would be for 2 mobile home parks with 8 units and 23 units in each park. He is whole selling the properties and has his own money plus hard money lenders in the deal. He would need my loan if he cannot find a buyer in 48 hours. I don’t have much detail yet but I am assuming I’m funding the full purchase price. This would not be an equity deal, he would pay points and if loan goes past 48 hours (1-3 months) he would also pay interest. In this deal, am I the 2nd note? Am I on the title of the properties as a private lender or is the investor? Do I get my own lawyer? Do private lenders have the properties appraised or ask for a report? I would love a step by step process. I know there are about a dozen more questions I’m not asking that I should be asking. What points/interest rates do private lenders usually charge? My interest is to join this investor as an equity partner after this deal, because I believe in his capabilities. But I also want to make sure that my investment as a private lender is protected.