Asking for Private money

[Nathan Harden]

When asking a private money lender for funding, do you suggest amortizing it over only the course of the loan or do you try and structure the contract so that it has a 1 year balloon with a longer amortization period? I have recently bought my first 3 rentals in the last few months, now I am trying to expand my portfolio and have ran out of my own capital. I don't have any experience in the private/hard money space so I figured that I would ask on here. It is a little nerve racking to think about borrowing someone else's money for the first time but I am also aware that this is a common thing for REI to do, figure that I better get my feet wet now instead of sitting on the sideline and dragging my feet any longer.

I am thinking that my best course of action is to hunt down properties that are turnkey or just need small cosmetic updates, pay for them with cash from the private/hard money then refinance them in 6 months or a year (whatever the seasoning period may be) with a DSCR lender. I have a handful of properties that I have been in negotiations with or have been keeping a close eye on. It sounds easy on paper, but I just want to make sure that I cross all of my T's and dot my I's before making the leap into the next chapter of my investment journey.

Any tips, advice or personal experience is greatly appreciated.