Private Lending with no BRRR? Confused?

[Vishal Amin]

Hi,

How would a private lending deal work with no BRRR? I understand when you are doing a BRRR and getting that appreciated value to cash out refinance and eventually pay the private lender back with interest, by creating forced equity. This makes sense to go the private lending route.

But...

For Example: Purchasing a turn-key home for $150K which is under market value, the private lender would pay the down payment ($30k). In the current market condition, it is hard to refinance at a lower rate. The buyer would eventually have to come up with the $30k + interest.

The buyer would only have to rely on the appreciation of the house also in this market condition might take a long time to appreciate.

I am looking for some clarification on this part.

[Rick Pozos]

You do a syndication. Your friends and family put up the 25 or 30% for the downpayment, BUT they get 70% of the deal. YOU get 30% of the deal and you manage the rehab and stabilization. YOU put your name on the loan which means YOU have a substantial net worth to get the $1mil or $2mil loan. PLUS you get a 2% acquisition fee for putting the deal together. BUT this is after you have significant net worth, experience and knowledge.