Hello BP. I’ve written about this topic before but now have an actual opportunity with a private lender. A friend of mine knows I invest in real estate and would like to continue to scale. He reached out stating his mother has come across a large sum of money after selling a property she was gifted. I talked to him about private lending before and said she may be interested but doesn’t know the first thing about private lending.
I want to approach her as professional as possible and make her feel secure with her investment. I plan on offering 8% interest only payments monthly for 6 months and then refinancing. Is there typically a payment on top of the initial investment at the end of the six months?
What can I do to be fully prepared before making a cash purchase? I plan on getting pre approved or at least talking to a lender to make sure I’m in the best position for obtaining the loan. I imagine I don’t want to have multiple lenders pulling my credit at once though, correct? I also plan on reaching out to a real estate attorney to see what guidelines need to be written up to safeguard her investment. I’ve read a few things like promissory notes, first lien on the mortgage, and having them be added to the insurance. I apologize for such a winded post, please let me know if there’s anything I missed. I feel like this could be a great opportunity to scale and want to make sure to when all my ducks in a row. Thanks!
