All Forum Posts by: Russell Zuck

@Account Closed

Excellent. Thanks for the clarification. There are additional knobs that can be tuned here so make sure you know what they are and where they're ponited.

@Account Closed

Thanks for the replies.

It turns out I was overthinking things. From the private lenders perspective, I was thinking they'd want to ensure a 15% (15 month term at 1% per month) return whether I paid the loan off early or not. Thinking about it now, they can tune points charged and the rate to achieve a similar result to account for paying off the note early.

I'm probably overthinking this but I'm trained as an engineer so there is precedent for this kind of behavior.

I've read a bunch of descriptions of private money lending and I want to make sure I understand the details of the jargon used in these descriptions. Assuming the following "typical" scenario below, please help me with these questions. I realize the use of the word "typical" is loaded please take it to mean usual or common.

Scenario:

Property Value: $125k

Loan Value: $100k

LTV: 80%

Rate: 12%

Points: None

Term: 15 months

Collateral: 1st position lean

Questions:

1. Is the interest rate expressed in terms of APR or something else?
2. I've heard people describe the terms as interest only with a balloon at the end. What, exactly, does this mean (please include numbers)?
3. Let's say the loan was to be used for a flip. If I were, by some miracle, to pay off the loan in 8 months instead of 15, what would the cost of the loan to me typically look like (please include numbers)

Thanks, in advance, for the information.

Cheers,

Russ

@Jaiden Olsen I haven't been to any RE Meet-ups yet. Do you have one that you can recommend?

Hi BP Community!

I wanted to take a moment to introduce myself and thank everyone, in advance, for the wealth of information I've already gleaned and will continue to glean from this terrific community.

I've begun my journey into real estate investing and am eager to start building my contact base, investment team, and find a market that suits my needs. Currently, I'm in the MFR buy and hold mindset, along with a ton of other people. I look forward to working with and learning from as many people as possible on this journey. So, I'll see you around the community and thanks again.

Cheers,

Russ