Can you please help me understand private money?

[Joe M.]

Hi BP

So can you please help me understand private money for long term buy and hold rentals?  I know this is pretty general question but are there a few traditional ways this commonly work?  

Does the lender usually lend the full purchase amount?  Just the down payment?  Do they ever just buy the property then create a seller finance situation?  

Moving forward, I can see this being a tool in the toolbox that helps, but want to have a better understanding of it to help create win wins for all that is involved. 

Thanks in advance.

[Matt Hurley]

The cool thing about private money is that it’s 100% up to you and the individual giving you money. Don’t think about “what’s common”, start thinking about what your private lender needs. Do they have a kid going to college in a year and they want tuition for the first couple years? Do they just want some extra mailbox money each month so they can go live in Hawaii? Are they looking to be an actual partner in your deal? Many approaches but it all comes down to the individual’s needs!