All Forum Posts by: Brian H.

@Kenneth Gordon Thank you for that information. Does it help that I have plenty of capital to cover the down payment but just want to preserve capital? I guess it is just the idea of multiple loans, as you said. Ok, barring issues with all that. I would love some advice on the actual structuring of those sorts of smaller personal loans... Rate and terms and such. Even if I dont use them, I just love to learn anything I can about all these processes.

@Wayne Brooks When you say "bigger issue", should I be concerned about something being a problem with the lender if they are just helping finance the down payment? I have no issue telling the lender.

Hey folks,

I have a nice deal under contract right now. In order to conserve capital on my end I have a couple people that are interested in helping partially finance the down payment. These are not official lenders of any sort.... just two people I know that have the money to spare and would like to make a little passive income.

Couple questions....

• How do I handle this so that I am completely above board? I am assuming we can't just have our little agreement/contract and that be it? Does this begin to wade into the waters of syndication? I know that involves SEC rules and such.  Or is it much more simple than I am thinking?
• Secondly, for those of you that do this sort of thing... I could use some help/recommendations in the structuring of these personal loans.  I know one is fine with 5 year term with balloon payment of the initial principal at the end of that.  Just interest up until then... the other would like more of a 2 year term, which I can handle... just not sure how to structure and what rates are reasonable these days for these sorts of loans from people you know?

Thank you all for any guidance!!  Hope everyone has had a great weekend.

@Maria G. It's just a job like any other since it is legal there. What is the issue? They don't grow in their homes. Not sure where you get that. They work on farms or in green houses where the medical marijuana is grown. Relax. Like you said, they seem like nice people and are being upfront with you. Marijuana isn't cocaine or meth. Much rather that guy over people that use other stuff or honestly even someone that has a drinking problem.

@David Bardwell Ah wow. Ok. Thank you for clearing that up! I will look into that for sure.

@Nick D.  They are valued on the tax site at about 160k in total. I am in for $200k. At their current occupancy (8 of 11 units) they bring in about $4200 per month.  After expenses, mortgage,  and setting aside for vacancy, repairs, cap ex, etc. they would currently cash flow anywhere from $1400 - $2000 per month as is.  I have plans to update one unit at a time. They current owners updated two of the units recently and they look nice but not too nice.  They are lower income units but still with good tenants on a quiet street.  The two recently updated units give me a really good idea of how to update the others as I move along.  Nothing too fancy, but nice enough to feel more "homey" than they do now.   There is major value-add potential. That is what I love about this, along with the absurd cashflow potential.

@Garrett V.  

I hear that. Some different term offerings just make sense to me. Open yourself up to more potential borrowers and make more money... but that is just my simplistic look at it. I figure they have their reasons. 

@Matt Crusinberry Really wasn't considering syndication and don't have much interest for these properties. Maybe I'm not fully versed on syndication though. Looks like commercial portfolio lending but just not sure where to turn for a lender that will work with me.

@Kerry Baird have you worked with him?

@Vik P.

Please keep us updated! :) Curious about this company as well.