Private lenders for long term buy & hold?

[Ray Li]

Hi, most posts and articles I've seen on private lending talks about short term high interest rate loans. I'd like to look into how to structure long term loans with private, with respect to interest rate, interest only vs 30 year amortization, loan period.

I'm considering buying and holding distressed properties and repositioning them using my own cash, and then find private lenders (as opposed to conventional or commercial lenders) to do a cash-out refinance. If I were to offer first lien position on the property (but no additional collateral), with around ~70% LTV (based on appraisal after repositioning), 5% interest only payment, and 10 year balloon payment with some kind of per-payment penalty, is this something lenders would be interested in? Or would you want better terms?

Thanks,
Ray

[Chris Martin]

@Roman M. I just got private money (not a family member) at 5% this week. It all depends on the context, the deal, the principals, and the motivation(s). So I agree with your post except change your 100% to 99%;) 

The best sources for longer term, lower rate funds are friends and family (F&F), IMO. I switch hit, with and without F&F by borrowing when appropriate (although not in the last decade or so) and lending. For non-family, I lend via SDIRA funds.

Hope that helps.