Private money - interest rate advice

[Archie Minkowski]

Hello Everyone.  I'm a long-time lurker and podcast fan.  Retired LEO now living in TN.

I've flipped a few houses through the years and have a couple of new opportunities on the burner.  I've used hard money companies in the past and now have a business colleague offering to loan funds on the fix-and-flips, both purchase and rehab funds in one lump sum.  To be clear this would be private money from an individual and not a company.  

He's asking 12% APR with no points or fees. The interest to be paid after the house is fixed and sells. This may be a simple question, but does that essentially mean 1% for each month his money is tied up? (12% divided by 12 months.) For example if it takes us 5 months to flip and sell, then we'd pay 5% at closing.

Thanks everyone for the great info on this site.  

V/R - Arch

[Robin Simon]

Quote from @Archie Minkowski:

Hello Everyone.  I'm a long-time lurker and podcast fan.  Retired LEO now living in TN.

I've flipped a few houses through the years and have a couple of new opportunities on the burner.  I've used hard money companies in the past and now have a business colleague offering to loan funds on the fix-and-flips, both purchase and rehab funds in one lump sum.  To be clear this would be private money from an individual and not a company.  

He's asking 12% APR with no points or fees. The interest to be paid after the house is fixed and sells. This may be a simple question, but does that essentially mean 1% for each month his money is tied up? (12% divided by 12 months.) For example if it takes us 5 months to flip and sell, then we'd pay 5% at closing.

Thanks everyone for the great info on this site.  

V/R - Arch

 To your question on the interest, yes, you have the correct understanding