Skip to content
×
Pro Members Get
Full Access!
Get off the sidelines and take action in real estate investing with BiggerPockets Pro. Our comprehensive suite of tools and resources minimize mistakes, support informed decisions, and propel you to success.
Advanced networking features
Market and Deal Finder tools
Property analysis calculators
Landlord Command Center
ANNUAL Save 54%
$32.50 /mo
$390 billed annualy
MONTHLY
$69 /mo
billed monthly
7 day free trial. Cancel anytime
×
Take Your Forum Experience
to the Next Level
Create a free account and join over 3 million investors sharing
their journeys and helping each other succeed.
Use your real name
By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.
Already a member?  Login here
Private Lending & Conventional Mortgage Advice
All Forum Categories
Followed Discussions
Followed Categories
Followed People
Followed Locations
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback

Updated about 5 years ago on . Most recent reply

User Stats

121
Posts
58
Votes
Steve Hiltabiddle
  • Lender
  • Pennysylvania
58
Votes |
121
Posts

Private lending with an equity stake

Steve Hiltabiddle
  • Lender
  • Pennysylvania
Posted

Good morning, BP.  Any lenders funding rehabs/flips ever combine a typical loan structure (interest, points over 6-12 months) with an equity component upon sale or refinance?   Curious how you may have structured the terms (lower interest rate to compensate for the equity, interest paid at end, etc) more importantly how you structured the equity side of the deal.   

Why did/do you include equity in your loans?

Did/do you end up making more money with equity or less?

How do you present this idea a borrower to share some of the equity?

Are some deals better than others for taking equity?  Perhaps a short term deal might be a 50/50 split on funds and no interest but longer might offer 5%, 10% in equity and interest.

I understand that if I take an equity stake I can not use my SDIRA funds as I would be considered a disqualified person.  But I do believe that by having equity, hours spent on the project can be counted towards real trades activity.

Thanks in advance for your replies,

  • Steve Hiltabiddle
  • Loading replies...