Any deal is just a blank piece of paper and you can do anything. I would have a contract that say's I can do interest only for a period of time not to exceed 5 years and see how that flies with the lender. They might want a commitment to start getting paid back after one year. So the difference would be negotiated. Then you could stipulate an amortization of principal and interest for 5 years, which is reasonable. You would also want the right to pay them off as quick as possible, and I doubt they would mind this. The important thing however is to not let anyone in as a partner. Keep the equity yourself. Partnerships rarely last. They are getting a great deal earning 10% and they can sit at the bar and look at their collateral!
Once again, invaluable insights, Tom. I’d love to see just a bit more clarity on the payout you suggested on $100,000 borrowed with interest only repayments(for how long) followed by principle + interest repayments (for how long). Thx!
Any deal is just a blank piece of paper and you can do anything. I would have a contract that say's I can do interest only for a period of time not to exceed 5 years and see how that flies with the lender. They might want a commitment to start getting paid back after one year. So the difference would be negotiated. Then you could stipulate an amortization of principal and interest for 5 years, which is reasonable. You would also want the right to pay them off as quick as possible, and I doubt they would mind this. The important thing however is to not let anyone in as a partner. Keep the equity yourself. Partnerships rarely last. They are getting a great deal earning 10% and they can sit at the bar and look at their collateral!
Once again, invaluable insights, Tom. I’d love to see just a bit more clarity on the payout you suggested on $100,000 borrowed with interest only repayments(for how long) followed by principle + interest repayments (for how long). Thx!