Structuring Private Money Loans for Rentals

[Carson M.]

Hello all,

I currently have sufficient income through my small business, good savings, but lack of taxable income and credit due to being self employed (taking deductions) and being 19 (lack of credit history.)

I am wrapping up a flip, as it is on the market. I am looking to purchase rental properties with the idea of expansion. I know I wont be able to get conventional bank loans, therefore I am considering seeking out private money, where no equity has to be traded (more simple legal structuring)

I am wondering how people structure private money loans for rentals, say offer 5% annually for x years on principle, then pay off principle? Or do you acquire a property, pay an interest rate, and refinance to pay off the investors principle? I read a lot about structuring loans for flipping, but not on rentals that do not have a quick, profitable exit stragegy.