Brrrr initial financing help!

[Caleb Scott]

I've read a book on BRRRR but I still have some questions. All of it makes since to me except the beginning. So you are finding a fixer upper, for this you cannot use traditional financing. A friend gave me a private lenders info, but I need to understand how this works. Say you have a $40,000 house. I think the private lender does 10% interest with a baloon payment at a year.

Do I still need to pay a down payment? And assuming $20,000 for rehab costs. So my total loan would be $60,000. How much would I be paying monthly at this time? And when I pay it off after the refi is it just the 60k I borrowed or is this where I add the 10% interest to the total? Do I pay a down payment plus the interest when I pay it off?

So would I pay 6,000 down to the private lender at the beginning for down payment…

Then rehab the place over 6 months then refi for an ARV of say $100,000 with a small local bank I have lined up. 0.70% on a cash out refi = $70,000 so at this point I could pay off the private lender for the 60k and have 10k left over at the 6 month mark?

if anyone could explain the beginning of a brrrr with a private lender it would be greatly appreciated thanks!