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10-30-2010, 04:45 PM #1
Renter
- Join Date
- Oct 2010
- Posts
- 1
One year note interest rate
Hi, I am looking for some investment from friends to do a RE deal. I am thinking about offering them a one year note with a fixed interest. Any idea what the current market rate for one year note is? I have got answer anywhere from 6% to 15%. But I don't know if the people know what they are talking about. Thanks for your help.
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11-01-2010, 08:27 PM #2
Fixer Upper
- Join Date
- Aug 2010
- Location
- St. Paul, MN
- Posts
- 42
Use you want to use 12-month Certificate of Deposit (CD) rates to gauge a baseline. Or even check out the interest rate on unsecured personal loans from the bank. Since your friends would be loaning you money, and they won't have an interest in the property (i.e. they won't be on the loan), then comparing to an unsecured personal loan may be the most representative. Also, just a few words of caution. If you plan on using this money to help purchase a property, you may run into a snag if the money borrowed is not from a blood relative. Good luck!!
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You should seek professional because they know what to do.
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11-04-2010, 07:12 PM #4
Condominium
- Join Date
- Aug 2010
- Posts
- 153
I would caution against taking a loan from friends. There are too many ways for things to go wrong and somebody ends up sour. Best to keep business as business and personal as personal. Just my two cents...
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11-06-2010, 09:33 PM #5
Condominium
- Join Date
- May 2007
- Location
- Minneapolis, MN
- Posts
- 138
Interest Rate on Investment Loan
If you have a friend willing to offer you capital on an investment deal anywhere between 6 and 15 percent I would take it. If you were to get a hard money loan from a private investor you would pay way more than that. I've seen hard money loans where the borrower paid up to 15 points on the front end, 15% interest and had to give the hard money lender a portion of the deal. Anyone giving you a real estate loan on an investment deal without charging any points is doing you a favor, they're not in it for the return. If they're in it for the return and not charging the points than they are a novice investor that doesn't have any idea what they're doing.
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