Hi Guys!
New pro member here! This is my first post!
I am gearing up to close on another deal, this time using private lenders to provide a large portion of the down payment. I have a few basic questions I would appreciate your feedback on! This is an income property that will be a long term hold. Income is strong, but there is opportunity to improve upon the current rent role with a few thousand invested in a basic clean up.
At the risk of sounding like a total newby... How are most Private loans structured? In a perfect world this would be a 1 year loan of about $25,000. I have a network of friends and family that are excited to invest in the deals I have, so I am NOT looking for new lenders.
My biggest questions are these:
What is a reasonable interest rate for a loan described above? is it unreasonable to think I could be in the range of 8-10%?
What are typical terms on an income property? Is 1 year "normal"? Are monthly 'dividend' payments made, or is it a lump sum at the end of the year? Both would be feasible given the current income stream.
Has anyone offered their investors a split of equity and debt? I would prefer debt only.
What do your agreements look like? I will need to be in contact with lawyers to have something drawn up I assume? Does anyone have anything I could look at?
Thanks in advance!
Rob
