Private lender money

[Nikko Tountas]

Hey guys,

So I am just getting into the real estate investing industry and am looking to purchase a few properties. I have a private money lender I can turn to for covering the down payment on the properties. What I’m looking to see is what is the best way to structure the deal to get him his money back the quickest way. He wants nothing to do with the property just wants his money to make money. I would like to just have his assistance to just jump start my portfolio. Thanks in advance for any advice!

[Stephanie P.]

Quote from @Nikko Tountas:

Hey guys,

So I am just getting into the real estate investing industry and am looking to purchase a few properties. I have a private money lender I can turn to for covering the down payment on the properties. What I’m looking to see is what is the best way to structure the deal to get him his money back the quickest way. He wants nothing to do with the property just wants his money to make money. I would like to just have his assistance to just jump start my portfolio. Thanks in advance for any advice!

 If he wants nothing to do with the loan and you're going for a long term rental, then you will have to probably source and season the funds to close for 60 days.  Not all lenders require it, but most do these days.  Funds to close include downpayment, closing costs and usually 6 months reserves.

If he wants to just be a money partner but still have his name on title in case something happens to you, set up an LLC that makes him a less than 20% owner. Most of the lenders in the DSCR space don't require anything (application, credit etc...) from any members with less than a 20% stake in the loan.