All Forum Posts by: Kelley Lefmann

Many thanks, @David Sims and @Sean Richway - that kind of advice is exactly the sounding board I needed. Will take all of that into consideration, and head back to the drawing board. Sincere thanks for taking the time to explain without making me feel badly for asking the newbie questions!

Thanks @Sean Richway & @Percy N. That's helpful. We are brand new. Just beginning our research, and have a partner who has offered to help us. I'm simply throwing out scenarios I've seen while researching on this forum, to get feedback on what is fair in our situation. We are not looking to get into a bad deal. just not sure exactly the best way to leverage this JV option. Again - it's early, so the more we learn and hypothesize, the better equipped we will be when it comes time to put the deal together. Thank you.

another question about JV partnerships:

If we took on a JV partner who financed 100% of a $130k deal, and we gave him 60% of the equity, we would have to refi in 3 years, pay his $130k back, plus 60% of the gains? Market appreciation is 8% per year where we are looking to invest. would we also split the cash flow? Also, if the JV partner pays cash, how would a refi work?

Thank you! That helps. Do those terms reflect a straight debt partnership, or is there an equity split on top of that?

We have already identified one, possibly two JV partners (family friends). We expect to do all the legwork - finding the deal, to managing the rehab and the tenants.

Thanks again, everyone, for the valuable input. This can be intimidating for a first timer, but that is why we are researching before jumping in. Just getting our ducks in a row. 

Trying to get more familiar with how others are using private lending - it sounds as if this is generally for the down payment on a conventional loan? If that's the case, what kind of terms are reasonable for the private lender? Need a frame of reference, please.  

Thank you!

We just don't have much to put down initially. Which is why we are considering private lending vs. a conventional loan. The mortgage payments are more than doable. It's the financing on our first deal that we need help with. No one will be "walking away" - quite the opposite - we're looking to partner with someone who is interested in a win/win (debt or equity) as our portfolio grows. 

Thanks John.

What is the highest LTV you've seen, with private lending?

If one goes with a private lender (good relationship) vs. bank or prof. hard money lender, but seeks 100% financing for the first deal - is it better to go with a debt or equity partnership?  

Would love any input from those who have successfully begun their real estate investment careers using private capital. I know that private lending offers endless flexibility - just looking for some typical scenarios, to set our expectations.

Other questions:

1. Are private, interest-only loans generally due in <5 years? 

2. What, on average, is the % interest a debt partner would expect - and how can one compare to a conventional loan interest rate, if the length of a private loan is much shorter? (Residential as well as commercial.) 

3. For equity partners, do they typically take a cut of rental cash flow AND gains at time of sale? 

4. How is a deal structured if one is seeking 100% private lending for a foreclosure cash purchase? (Assuming minor cosmetic repairs, buy & hold rental, and refi in 3-5 years?)

5. What else should I be asking??

Thank you!

@Joe Fairless - great advice. I am detail-oriented and great at research and marketing. He is great with people (I'm no slouch, but he seems to have a way with making people feel at ease, when I am a bit more intense). I've been serving up properties in my research, and after we analyze them together, he will be the point-person to present the deal to our potential investors. 

Thanks, @Peter Abualzolof - I tend to agree.  At this point, we are focusing on single family rentals. 

Incidentally, I grew up in San Jose / Campbell. :) 

Cheers!