Private Money Mechanics

[Matt Burgess]

Hi everyone,

My partner and I are looking to start using private money as a financing option for the BRRRR strategy.

We understand the high level concept (how we pay them back, benefits to them, benefits to us, etc), but there are some minor details that we would like to understand better before asking someone to invest with us. 

1. Should we get a proof of funds that we can use when submitting offers? I believe it is common practice to submit a proof of funds when submitting a cash offer. How do we get that from a private money lender?

2. How does the money actually change hands? For example, do they write us a check when its time to close? Do we need to have the money in our account prior to closing? Do we write them a check after the refinance or are they paid by the title company?

I would love to hear how you all are currently using private money, specifically around the questions above. Thanks in advance!