What is private money in real estate?+
Private money is a short-term loan from an individual investor (not a bank, not a hard money lender) who lends their own capital secured against the property. Terms are negotiated directly. Typically 8-12% interest, 6-12 month terms, sometimes interest-only. Private money sits between hard money (institutional lender, 4 points + 12%) and conventional financing (slow, paperwork-heavy).
Is the private money calculator actually free?+
Yes. Anyone can run unlimited deals with private money structures at no cost. Free registered users also unlock the Score Certificate PDF — useful for showing your private lender a clean deal summary before they wire funds.
How do I structure a private money deal?+
Most private money deals follow one of three structures: (1) interest-only with balloon payment at exit, (2) fixed monthly payment for term, or (3) profit share with no monthly payments. Tell Freddie which structure your private lender prefers and he models the full cash flow, including total interest paid and impact on your net profit.
What return can private lenders expect?+
Most private lenders target 8-12% annual return on real estate-secured loans. Some accept 6-8% for first-position liens with strong borrowers. Friends-and-family deals often run 5-8%. Freddie shows the lender's annualized return so you can pitch the deal honestly.
How does private money compare to hard money on the same deal?+
On a $200K loan over 6 months: hard money (4 points + 12% interest) costs ~$20K total. Private money at 10% interest-only with no points costs ~$10K. Half the financing cost. The catch: private money requires a relationship and trust. Hard money is transactional. Freddie compares both side-by-side on every deal.
Do I need an account to use this calculator?+
No account required to model your private money deal. A free account unlocks the Score Certificate PDF, saves your deals, and gives you 2 lifetime Rentcast lookups for verified ARV.