Do Private Lenders Do Something Like This?

[Nick Belsky]

Hi all!

First time starting a post on BP and new to REI. I have been researching Private Lending options and resources to use for BRRRR, but am hitting a walk on grasping loan structures that are feasible to a PL. I realize that details vary from lender to lender, but is this scenario even remotely close to what is feasible:

I'd like to secure a loan from a bank but need help with the down payment. Would an investor consider fronting the DP? I'd take on all the costs of rehab. 6-12 (based on seasoning requirements) months later, refinance and pull cash out to repay the investor with interest and I'd hold the property to rent and use any proceeds towards another property (DP or Rehab costs). Eventually, I'd be able to roll proceeds to cover my own down payments.

I see several issues here and perhaps the community can offer some clarity or other points of view.

I don't know if PLs are going to be interested in only working with say $40k of capital to return such a small dollar amount ($6k @ 15%)?

It's tough to find properties where I can rehab them and make enough margin to cover the PL return, recoup my rehab costs, and make reasonable ROI. Was targeting properties 20-25% under value, but is looking like I need to be targeting 30-35% to make rough numbers work...?

It's going to take several (maybe 5 or 6 or more) "rinse and repeats" to get any substantial cash on hand to invest in DP on my own...

Maybe I am looking at this all wrong. Does this sound at all how a PL deal may be structured or are there other ways to structure financing with PL to accomplish a similar outcome?

I've spoken to several PLs and got a wide range of answers... Lol. Wondering what you all thought.

Thanks in Advance!

Nick Belsky