Using Private Money For Deals

[Frank Teshima]

Hey fellow BP members, I have a private lender that has quite a bit of equity in their home. I found out about it and approached them with an opportunity to put that money to work. I told them that instead of taking my business to the bank, ill do business with them. My plan is to buy a residential multifamily property, using private money, pay them exactly how i would pay a bank. and in order to add value, I would fix up the units, raise rents, and then refinance with a bank, pay off the private money, and just recycle the private money. 

With that being said, first of all, is this similar to what people do? and how do i structure it? if possible, could someone share what their terms are with their private lender. Any experiences and tips are welcome!! Thank you very much for the help!!!!