Private Lending Questions

[Roman Stefaniw]

Hello all! Im brand new to the forum and to real estate investing and have a question involving private lending. From what I understand a private lender is interested in lending his/her money out for a super high interest rate and to expect the money back in a fairly short amount of time. Is it a bad idea to get a private lender for a long term investment then? Would it be better to get a partner rather then a private lender for a long term investment.

Say i have a duplex for 100 000 down. Say it requires 25% down for being an equity property. If i could go 50 50 with a lender we each would be putting in 12 500 in the investment. Say after all expenses are paid I have a cashflow of 300$. How do you pay the lender back in such a short time? Is it a bad idea to use a private lender for a long term investment? Does anyone have experience with that? It seems like a lot of money would be waisted to high interest rates. 

Any Input is appreciated. Thanks in advance!!       

[Caleb Heimsoth]

In this case they’re an equity partner, not a lender. You’d split the 300 cash flow and each get 150 and you’d both be on title.

For long term investment here’s an example for a private lender, but note finding a lender who is onay with this could be difficult. Firstly if it’s residential, you can’t borrow any of the down payment so likely it’d have to be commercial.

Let’s say I have a 10 unit building for 400k. I need 25 percent down. I bring 50k and my private lender gives me 50k. The bank does the rest.

Basically you’d have two mortgages on one property. Another way people do this is if bring 50k, the seller owner finances 50k and the bank does the rest.

Hope this helps!