How are you structuring your private lender deals?

[Robert Napolitano]

Hi Guys!

New pro member here!  This is my first post!

I am gearing up to close on another deal, this time using private lenders to provide a large portion of the down payment.  I have a few basic questions I would appreciate your feedback on!  This is an income property that will be a long term hold. Income is strong, but there is opportunity to improve upon the current rent role with a few thousand invested in a basic clean up.

At the risk of sounding like a total newby... How are most Private loans structured?  In a perfect world this would be a 1 year loan of about $25,000.  I have a network of friends and family that are excited to invest in the deals I have, so I am NOT looking for new lenders.

My biggest questions are these:

What is a reasonable interest rate for a loan described above? is it unreasonable to think I could be in the range of 8-10%?

What are typical terms on an income property?  Is 1 year "normal"? Are monthly 'dividend' payments made, or is it a lump sum at the end of the year?  Both would be feasible given the current income stream.

Has anyone offered their investors a split of equity and debt?  I would prefer debt only.

What do your agreements look like?  I will need to be in contact with lawyers to have something drawn up I assume?  Does anyone have anything I could look at?

Thanks in advance!

Rob