Why would you be willing to pay such a high interest rate on these loans?

And here is a very common question you will likely want to address with your private lenders. It is one of the ones that I answer in our private lending FAQs.

The question is: Why would you be willing to pay such a high interest rate on these loans?

My answer to the question is:

I am willing to pay high interest rates on these loans because it allows me to buy more properties and make more money.

Having access to private funds to buy properties at a discount means that I can make more money. Paying a little more than I would for a bank loan is a small price to pay for being able to buy the property and make a profit.

In each case though, I want to make sure that the property can support the any loan that we have on the property. So, if a particular property cannot afford to support a loan with a certain interest rate, we will either not buy the property or negotiate the deal so that the property can support it.

Until my next post,

James

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