All Forum Posts by: Frank Y.

Don't send the 1%.

SEC Regulation D rules how to raise capital for your business. Dodd Frank rule the banks. To look for reliable private lenders, the best way is to network with local guys. If you do ad at CL, you may get all scams. Good luck.

As Christian Wathne said, private money is between 10 to 12, some lenders also charge points. Family members are negotiable. But whatever term/rate you guys agreed upon, make sure to document everything and have all parties signed.

You don't need to contact the buyers bank. The settlement company will contact you, either they will have a satisfactory letter for you or ask you to draft one for yourself. At closing you will sign a release letter or satisfactory letter to release your mortgage and get your check.

As @Rick Pozos pointed out, this is not a borrowing/lending relation.  You need to work out the numbers and make sure which way make the most profit for you.  The lender is getting more than just 40%, he get the interest paid first, prime plus 3%.  

It is a good think you have a lot of private lenders coming your way. Normally PL charge points and interest. Few PL will finance 100% of your purchase price. When you compare, ask their points, fees, rate, draw fee, early termination fee, and etc.  The best way is working with your local PL, instead of big national ones. Good luck. 

I lent much more than $80k to investors without any questions. The money from your family members will be used to pay the seller at the settlement, either in cashier check or wire transfer. As long as the $80k is in your family member's bank account.  Well, if your family members have $80k cash under the mattress, then they will need explanation.  Good luck.  

111% return on investment? You need provide more details for people to answer your question. 

It should be very simple. When you are almost finish the rehab, start to talk to local bank and get your information to them as much as possible. Once the rehab is complete, the bank will order an appraisal and approve your loan. At the refinance settlement, you pay off the private lender's money with the money from the bank.  Good luck. 

@Solon S. Yes, I believe ALL private lenders do provide Proof of Fund Letter to you for you to give to seller when you submit the offer.