Fix & Flip W/ Private Lender?
I need to know how I should approach making my dream come true. I have access to a private lender through networking YEAH!! However the interest rate is 16+%. Now why exactly isn't that supposed to bother me? Also is it common practice for a private lender to require specs on each property you want to do before approving the loan? Are they planning to use the property as collateral before I even buy it? How so? I guess I just don't understand the timetable involved between me selecting, getting the money, buying the property, fixing it, selling it and paying them back in a year @ 16+%. Any help with this one would be appreciated.
Can someone draw this in cartoons for me? 
Are you calling a Hard Money Lender a private lender? What you're talking about sounds more like hard money, to me. And, just about any lender's going to want to know what they're lending on. The way it works, you find a property, get a contract on it, take the numbers to the lender, run it by them, they either fund the deal, or they don't. A couple things to note here... If you're gonna go this route, make sure you've got acquisition costs, and figure a MINIMUM of 6 months of holding costs. Most hard money people I know will only go 60-70% of ARV for a loan...
Most lenders will want to get an appraisal (future appraisal) on the property they will be lending.
16+% WOW, have you looked into other programs (other than hard money) that will lend at lower rates and higher LTV? some of these programs require you to have decent credit.
So basically I understand you to be saying that I get a contract on the property. Is that the same as making an offer? And are you also saying that I need to have the $ to buy it (acquisition) without the lender? And does that mean that I should only use the hard money for the fix or can I use it for the acquisition, the rehab and holding costs. If the properties new market value will increase enough to cover all those expenses.
:cry:
Jazzy,
Focus less on the lender at this point and spend some time reading the articles and other messages posted so far. As you want to rehab and then flip, look at the forums that are focused in these areas (the forum names are obvious). Also read up on the mortgage/notes forum.
You can really get yourself into a bad situation if you do not learn a bit more at this stage.
And all the other advice (surf the web, speak with other investors, join the local investment club, network here, etc).
John
[addsig]
Thanx for your sound advice to study more.
Jazzy