Private money terms?

[Cody Burke]

Thoughts on $150000 loan @6-9% interest amortized for 15 years with ballon in 5 years for a down payment on a self storage complex? Or would you find pm to finance the entire purchase and refi after a year?

[Alex Breshears]

Hi Cody! As a private lender myself, I will tell you that it will be hard to find a lender that will do this type of loan.  Think about it from the lender's perspective. They are supplying the capital that is most at risk of being lost. If the market softens, your business plan doesn't go as planned, you don't have adequate insurance if something happens to the property, and the list goes on and on, the capital is at stake.  Also, with rising interest rates, few people are going to want debt tied up in a deal for 5 years, especially at those rates.  You may have more luck trying to find a capital partner, so they are on title of the property and could participate in how it is run and also participate in the upside.