Financial Partner
I have someone that will loan me money to buy real estate and I want to use it for apartment buildings.
Would the following structure work.....
They loan me the money at say 6% and we amortize and pay it like a normal loan. The money will be loaned to my LLC, and I will keep 95% and give the lender 5% to make it more profitable for him. Then in 1-2 years I would look to refinance and cash his loan out and buy him out. He would then get his money, and I would have 100% of a cashflowing building. I am looking at 4-8 units to begin with.
This will basically be a sales pitch to the guy and I am trying to make it very good for him, as well as me. What can I expect to get as a refinance percentage? Would they look at my credit and assets even if the place has a proven cashflow?
Anyone else have any ideas how a partner like this would work? Anyone else in this situation?[ Edited by Eric5 on Date 08/03/2005 ]
Thanks for the info Paul. Does anyone out there use private funds to buy apartment buildings? I mean everyone doesnt use banks ..... How would the best way to structure a private loan on an apartment building to make the loan lucrative for the investor. It isnt possible usually to give them the "standard" 12% because then the property doesnt cashflow.......I thought my suggestion was a good alternative, any comments?
If I were you, I would give up the " Got Credit Issues? No Problem!" and instead focus on the qualities of the house, ie remodeled, updated, freshly painted, hardwood floors, move in condition, etc... you can add the owner financing info if you want.
People with decent credit might think that the house is not good enough for them because of the description.
you should also try listing on a FSBO site for more exposure.
just my two cents...
Get "For Sale" signs and post them all over the neighborhood, intersections etc.
You may want to try a rent to own option. If you need help with that let me know.
I would try to get a local realtor contract and either use that or use it as a guideline.