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Updated over 11 years ago,

User Stats

25
Posts
3
Votes
Kyle Pettit
  • Residential Real Estate Broker
  • Wenatchee, WA
3
Votes |
25
Posts

Private Lending Terms ?

Kyle Pettit
  • Residential Real Estate Broker
  • Wenatchee, WA
Posted

Today, I have been educating myself on private money. A few posts came very close to answering my question (or maybe they did and I can't quite wrap my head around it).

On a typical Private money loan, what is typically used for an amortization schedule? For example. A typical Private lender is only interested in lending 3,5,10 years.

I have a property I'm picking up for $100k. My private money lender agrees to terms of %10 but is only willing to do a 3 year term. Obviously if this is a property I may want to hold, there is no way it will cash flow while making payments to my private lender amortized @ 3 years.

In an instance such as this, would this be a deal in which you would make interest only payments, and have another lender lined up near the end of the loan terms?

Now I understand in this exact example, the best case scenario would be to simply finance the property with an institution on a 30yr fixed loan. I'm just trying to understand how people make these types of scenarios work using private money lenders who are only interested in lending shorter terms.

Again above numbers are strictly examples.

Respectfully,

-Kyle

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