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Updated 10 months ago,
Paying Back Private Money
Hello everyone,
I am curious about paying a private money lender back on a larger buy and hold purchase. I know (roughly) how it paying back a private money lender would work for a fix and flip or even BRRR, but how would a person pay back a private money lender on, say, the purchase of an apartment building? Does a person always need 20% or so down? If a deal if privately funded, and these are shorter-term loans, can I do a cash-out refi after a time to pay back the private money lender? Does a cash-out refi even work if you're not doing a significant value add?
Thanks to anyone willing to provide some insight! I'm interested in moving up to multi-family in the near(ish) future, but I'm thinking it might be difficult to find 20% to put down on a significant purchase. I like the idea of a lender looking at the deal and not pulling my credit (again), but I'm wondering how paying such a lender back would work, considering a (likely) higher interest rate and short amortization period. I'm less interested in updating a property at this time.
Thanks again for any clarity on this!
Dustin Horner