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Updated over 12 years ago on . Most recent reply
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How much to pay private lenders?
Like the title says, how much do you pay your private lenders? I have seen that 8% - 15% seems like the average.
Now another question - is that 8-15% on the money they lend you or of your final profit?
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Chris,
You asked about private money lenders and not hard money lenders. All the answers you received are about hard money loans.
I rarely pay points on private money loans. Most deals get 10% or 12% interest based on the loan amount.
So in your example of a $100k loan, at 12% interest, yes, you would owe $1k a month. Typically, I have the loan contract to pay the principle and interest in one balloon payment, and not monthly interest payments, so at the end of the term, say 6 months on flips, I would pay the private investor $106k
For holds, I would structure the interest payments monthly.