Private Money - How do I make offers with it?

[Taylor White]

Hey all, 

So I have several interested investors who have seen the 2 houses that I have remodeled and are interested in lending me private money. Now my only hang up is... What are the logistics of this? I'm just trying to figure out my next steps so I can start making offers asap!

For a quick summary on what I'm doing... I'm looking to BRRRR SFH's in my area. Distressed properties that are under $60-70k and need extensive renovation. Looking for ARVs that are $120k and up. I will probably be using entirely investor money and offering something like 8% interest delivered within 12 months. I will have some cash reserves of my own.

1) Would you recommend going to an attorney first to draw up papers for these agreements? I've been told that the title company can do some of this, but if the protection/thoroughness of an attorney would be way safer, then I'd happily pay those relatively small fees upfront to save headaches later

2) What does it look like when you fund a deal with investor money? Will they need to wire funds directly to the seller at the time of purchase? If I'm using personal friends who trust me implicitly, would it ever make sense to hold their investment while I'm looking for a deal so that I can move quickly, or would that have some bad tax/legal consequences?

3) My lender mentioned something about needing the note to be signed by the investor so that they can pay back the investor directly... Otherwise they may not be able to do the refi. Does anyone have more info on this? Is the note he's talking about just the agreement that I have with the investor, or does this have something to do with having their name on title? I'm a little lost on that one.

4) The investors I'm using are personal relationships and don't necessarily have real estate investing experience. Would it be in the best interest of both parties to keep it simple and just do a full payout when I refi, or is it better for me to still be making interest payments to them during the rehab phase?

Even if you can only answer one of these questions or have other related advice, I'd really appreciate any feedback!