Insights on my plan to become an out of state real estate investor and private lender

[Carlo D.]

Hi! So a bit long winded post but I'll try to keep it short. 

I have decided (with a partner) to start a real estate investing company. The strategy we will use is buy and hold rental properties out of state. I am aware of DSCR loans (among other types of unconventional loans), But at the same time, I do have an amount of capital such that I can float the first 3 to 4 deals that my partner and i get into.

Here are my bullet points on my train of thought:

1. For a wide array of reasons, some of which are  fees associated with loans (origination, points, appraisals, etc) I would like to act as a private lender to the real estate investing company that my partner and I are setting up. 

2. As the private money lender, Id rather make the interest income myself versus giving it to someone else. 

3. As the part owner in the real estate investing company, I get all the benefits (and yes, I realize, all the hassles/headaches/risks) associated with being in this part of the business.

4. My thinking is to initially give a 2 or 3 year interest only loan to my REI company. 2 to 3 year should be enough to purchase, rehab/improve and stabilize the property.

5. After 2 to 3 years, depending on where interest rates may be then, my partner and I can then look at refi opportunities and at that point, hopefully the property has appreciated somewhat, such that we can then pull out (a. the private loan, b. the downpayment we both put in and c. plus a little bit of capital gains).... Almost like BRRRR but on an extended time frame.

With this thought process in mind, I would love to hear the group's thoughts on this.. Pitfalls, blindspots, pros or cons I may not have thought of.  Any input would be greatly appreciated. Thank you so much in advance.