Question For Private Lenders

[Michael Cox]

I have a question about private lending? Say I come across a property for 150,000. I only have enough money for 10% down, $15,000. At the same time, I have a good friend who could loan me other 10% for the down. Doing the comps and calculations for updates to the property, it would be worth $300,000 ARV.

In this situation could I have the private lender hold the title/deed while I held the note and re-payed the bank? And then, when the time came to cash out refinance, pay the money owed to the private lender plus interest and have the title/deed transferred to my name?

I'm asking this because if the repairs and upgrades took longer than a year the private lender would feel like they are not getting their money's worth for the investment, but if they held the title/deed at least they would have ownership of the property till the debt is re-payed.

Is this something that can work?

Thank you all for your comments in advance.

[Michael Cox]

Thanks Scott, 

I appreciate the response. I'm currently just starting out and trying to figure out a way to structure deals when the time comes. I will also look into hard money lending for sure. My main goal at first though is to get friends and family involved on some deals so they can benefit as well. 

Hopefully my first purchase is a SFH which I am able to find out how much the property would be worth after I update it. But I do not have the knowledge on how to estimate the ARV of a duplex or any multifamily properties. I generally understand that they run like a business for value/worth (NOI/cap rate) but I don't know how to comp them like a traditional SFH.

Again, thank you!