How do I structure private money deals?

[Meghan McCallum]

Hey there BP!

So, it has come to the point in time that I want to begin offering up opportunities to invest with my company. I don't need the loans, I have cash to work with and banks willing to lend me money pretty much around every corner. However, I feel the tides turning with bank loans and interest rates and I really believe now is a great time to start gaining trust of some private lenders. Now, I have a SF I would like to buy and flip or re-fi and hold. The deal is good enough to do either with a very handsome profit. I have had conversations with a couple people who I would like to be some of my private lenders. 

How do I frame out the opportunity. I was going to offer 6% no points, I know I can get people for that. Now, how and when do I pay them out? The loan would be for $200k-$225k (to purchase the property) and the projected construction would be for 6mos. I am going to put up the cash for the renovation itself, so the loan would be secured by the property itself. Reno and holding costs approx. $100k and ARV is $484K.

Is it normally structured an interest only loan? Is it paid monthly? Or is the loan paid back the 6% upon the completion of the project? 

This is new territory for me. I want to start with these small offerings but ultimately I want to syndicate some larger deals and get into apartment complexes.

Any advice from the big players out there?