Now suppose going along with the above, the borrower had a $375,000 mortgage (which they DID) on the property at an interest rate of 3.25%.

The tools on Zillow and Redfin aren’t especially helpful since the house is off market, and they’re underestimating the number of bedrooms.

Overall though, if it's a private loan and not a hard money loan, other than the costs of the loan itself (interest rate, points, etc.) the costs should be pretty modest. 

You should have someone local who can drive by to check on the property, respond to emergencies, conduct regular inspections, etc.

Also, this creates misalignment of interests as the deal unfolds.3) Check the details of the operating agreement.  

Quite the opposite.

Ever hang up the phone and think of one more question?

Hey Priyanka,Welcome to the forums!

The first hurdle was convincing them to leave via cash for keys.

I also help manage several small portfolios for family members with properties in Austin TX and Juneau AK and will be purchasing about $2.5m in additional small multi-family properties in Austin TX and/or Juneau AK by the end of the yard.