Private Lender Advice

[Gregory Brooks]

Hey guys, I am new to BP, well posting on BP.  I have been lurking for a awhile and when I have a question I search for it and always find the answers somewhere in the forums.  

Anyway I have a question regarding private lending that I couldn't find or get some candid advice from. 

I have an acquaintance that is interested in being a private lender for me to invest in real estate, as long as the numbers work.  What, in your opinion, is the best way to structure a private lending deal primarily for buy and hold properties? 

here are some scenarios that I have thought of: 

1.  Private Lender covers the entire cost of the purchase including down payment, closing costs, rehab, etc... then combine all of that into one lump sum that is lent as a "mortgage"  with a predetermined interest rate. I would have $0.00 of my own invested, but pay off the loan amortized over 10, 20, 30 years etc... in this case the lender acts as a he bank. 

2.  The Private Lender pays upfront down payment, closing costs, rehab costs, etc...  I get a conventional 30 year loan on the property's and split the cash flow and equity 50/50 with private lender.  

3. Same as option 2 minus the equity and cash flow. BRRRR the property and pay off the lender plus a predetermined amount. I know this will only work with a BRRRR potential property.

Any advice, criticism, or other potential options would be greatly appreciated.  I do plan on reading Brandon Turners book on low and no money down investing.  

Thanks for your Time,

Greg Brooks