Long term rental help

[Ethan Board]

If buying and holding rentals for long term. How would you use other people’s money to get one? Would you use it as a down payment or rehab costs or ______? Then if your mortgage is for 20-30 years how do you pay that private lender back out of that? Or is using private money for long term not a good idea? Looking forward to any response. Thanks!

[Paul Lovely]

One way would be to utilize the BRRRR strategy to temporarily use private and/or hard money loans to purchase and renovate a distressed property, rent it out, and then refinance into a conventional loan afterwards based on the property's after repair value (ARV). This would allow you to use the mortgage from the refinance to pay back your private/hard money. If the ARV comes in low or you go over budget such that you'd have to leave some money in the deal, you could either sell and likely still turn a profit, or find a private money lender to close the gap for some kind of equity split. If you have the ability to get a HELOC or HELOAN or could do a cash out refinance on an existing property, these funds could also be used.