Updated almost 8 years ago on . Most recent reply
ROI for private lender
I have the possibility for a loan from a private investor for my next investment home purchase. I haven't accepted private money before, nor has my potential investor loaned money for such an investment before. I need help in understanding what is a reasonable or "standard" return the investor can expect and how the loan should be structured. My intention for the property is to buy, rehab, rent and refinance. I would pay the investor back in full plus their "return" when I refinance. So if things work as planned the loan would be fairly short term. Any advise or info would be appreciated.
Most Popular Reply
Absolutely. It all depends on what you both want. The investor wants a return on his investment and you want the use of his money until you can refinance it. You guys both need to determine what that timeline looks like what the percentage rate should be and what the penalties are if you don't meet the guidelines. Ultimately this is meant to be an amicable relationship where you both get what you want/need. this should all be done in writing and with a valid contract normally done by a real estate attorney.