All Forum Posts by: Damon J.

I have been providing mezzanine funding for the past 4 years in several spaces: single family fix &flip, subdivision development and apartments.

Returns are generally in the 12-25% range and there a number of equity possibilities.

Would love to meet others that have done something similar and trade stories.

Yes, you are in second position which is the major downside and you generally need a larger investment $100k+ but the returns in quality projects exceed the risk.

What are your experiences???

@Jeshua Patrick can you explain this further? Not seeing how he could get to 10x?

I have used Aimloan.com a number of times and found they have very competitive rates and good customer service.  Have others used them for their first 4 rental homes and have similar/different experiences?

Are there other online companies that you have found better "total" rates?

I am lending money to a developer and the agreement is a lump sum payment based on participation of profit. As I am currently on the deed my repayment will be noted as Interest Income and received on a 1099.

Does it matter if I am not paid until after one year?

Is there a more advantageous way to lend the money and have gains be treated as capital gains versus ordinary income.

My goal is to continue to invest with this developer for years to come and roll over the funds, but not sure where I should start to come up with a better solution than ordinary income via a 1099.

Thanks for the reply. Realize I misstated originally. The main loan is 65% to the total purchase and construction costs and my loan would be 20% of the total costs. The market value is estimated at 1.4 times the cost so the ratios to market value would be much lower.

What rate would you expect to receive when lending money privately to a very reputable developer under the following scenario:

Tear down and rebuild

Bank is primary loan at 60% market value.

Private Loan is for 25% of market value and is SECOND

12 month term, interest paid monthly.

Thanks for the great replies, definitely helps clarify.

If I have a commercial loan it does not impact the count for Fannie/Freddie, correct?

Hopefully you can help me undertstand something in regards to the 4 unit rule. Here is my scenario:

1) Primary Home - $300K mortgage
2) Investment Home - $100k mortgage
3) Investment Home - $100k mortgage
4) Investment Home - $100k mortgage

If I get a 5th property which is not 1-4 units that will be at a higher rate. After I own 5 what happens if I sell my primary home and want to get a mortgage on a bigger home in the future?

Would it be my fifth mortgage and thus be at a higher than average rate then conventional financing even though it is owner occupied?

I am trying not to screw myself as I do plan to upgrade homes in 2-3 yrs. How can I avoid this scenario??

If I was to purchase that fifth house in the scenario above using a commercial loan would it count against my fannie mae count? In other words would they look at it as 4 conventional financed homes and one commercial mortgaged home? If so would I then be able to sell my house and purchase another under conventional financing rules?

Appreciate any thoughts.

I am looking at purchasing a 5 unit property in the City of Atlanta.

Want to understand how different a commercial loan is versus conventional financing.

Purchase price will be $300K. It is a short sale. I can put down 30% if necessary and have excellent credit.

Initially looking at it commercial mortgage looks to be signficantly more expensive then conventional financing on a comparative quadplex.

Interested in getting some general figures for commercial loans in my scenario. Thanks.

So assuming 5 units that means I need a commercial loan.

I have no experience in this arena, whet should I expect in comparsino to conventional financing?