This is a private loan I provided to a family who owned two townhouses as rentals. I cross-collateralized these two properties along with the one the son was purchasing in Pensacola FL. The loan was for 12 months, with n approved 18-month extension. During that time they used my capital to fix & flip 3 properties total. Their return compared to their costs was phenomenal. If you are struggling with capital infusion, offering up your or a partner's free and clear assets can do wonders!

What made you interested in investing in this type of deal?

I was collateralizing a total of three properties with a combined loan-to-Value of 25% of AS-IS! While this allowed the investor to get into the deal, with $0 out of their pocket and I offered 100% true financing, my security and safety was in the fact I had 3 properties two of which provided rental income that paid for my debt. These are the type of deals, I look for. Looking for ways to offer equity to a "property rich" but cash-poor investor is a great way to structure your capital stack!

How did you find this deal and how did you negotiate it?

This deal was referred to me through a contact I had on Facebook. I spoke with the son of the family who was fixing & flipping aproperty in Pensacola, FL, and then he brought in his parents who owned the Free and Clear assets to discuss a strategy to get him in his deal with $0 out of pocket.

How did you finance this deal?

I financed this deal using my own capital, as well I structured a participation loan for some of my capital investors so they could participate, and earn passive income while investing just like the banks do; in a secured and risk-controlled position, while shifting all known risks, to the borrower. A true win-win-win!

How did you add value to the deal?

By thinking outside the proverbial "box" of lending, and because I lend out my capital, not brokering for these large national lenders, I have a lot of flexibility. Discussing the needs of the client, and finding a solution that meets their specific needs goes way beyond just "rates and points" questions most RE Investors ask. I much prefer to connect and discover ways to help an RE Investor grow and reach their goals. I'm not a fan of working with rate shoppers and I charge them the most.

What was the outcome?

They needed some more time on their loan, it was originally a 12 month loan, and ended up going a full 18 months. Because they always paid on time, I easily granted them an extension, and the extension fee was charged on the backend. I gave them another 6 months before requiring to be paid off. During the 18 months, they completed a total of 3x fix and flips while using my capital, and allowing me to collateralize their rental assets.

Lessons learned? Challenges?

This was an easy, great simple loan, and to all you RE Investors out there, having the willingness to discuss your goals, strategy and hurdles you are trying to overcome with TRUE private lenders, can result in some fantastic results and solutions. This strategy will not work with large national HML, but if you can find a private lender, that operates in your backyard, then you can find some true win-win-win scenarios.