Private Money Lender How to Get Them and How to Keep Them Long-Term

By Mike Lautensack

Finding a private money lender is an essential part of any real estate investor's business. One of the keys to finding a good private money lender is determining if they have similar goals and objectives as yours. So how you determine if you and the potential private money lender have similar goals. You need to discuss your plan and ask questions similar to a job interview.

Finding a private money lender is an essential part of any real estate investor's business. In the old days (pre 2006) you could easily get a mortgage or even hard money loan simply by showing up in the lenders office and filling out an application. If you could walk and talk you qualified for a loan.  But today in the post credit-bubble market those days are over. Getting money for your real estate investing business is much more difficult and likely to get even more difficult as the credit markets sort things out. So how do you get money for your real estate investment business?

The answer is a private money lender.

One of the keys to finding a good private money lender is determining if they have similar goals and objectives as yours. You need to understand what they are trying to achieve and if your private lending program fits their needs. For example, if the private money lender wants an investment for a 10 year period, but you plan on doing quick flips every 6 months, it will not be a good long-term relationship. You and your private money lender need to have similar goals for a good long-term relationship that will result in repeat business.

So how do you determine if you and the potential private money lender have similar goals. You need to discuss your plan and ask questions similar to a job interview. We would recommend a series of questions similar to those listed below. Obviously, you can modified these questions to fit your personality, but the information you get will go a long way in determining if this is a person you want to do business with.

Important Questions to Ask
? How much do you have in liquid funds?
? Do you have other monies you might want to consider for an investment program that pays 9% to 15% and secured by local real estate?
? What type of investments are you in right now?
? How much are they making on your current investments?
? How long do you want your money invested for and do you have plans coming up that will require your principal back?
? How available is your money or is it tied up in investments that are not readily accessible?
? Are you a "Qualified Investor" (person must either have a net worth of about a million dollars or have an annual income in excess of $200,000)
? Do you know anything about real estate investing?
? When would like to start investing?

Asking these questions will flush out how close your goals are and will foster a good long-term relationship.

Mike Lautensack is a full-time real estate entrepreneur in Philadelphia, PA and creator of the Private Lending Presentation Kit. This powerful done-for-you kit is loaded with tools and techniques to attract and develop a consistent stream of private investors into your real estate business. To learn more about this kit and receive your FREE Real Estate Wealth Newsletter go to http://realestatewealthtoday.com/Private-Lending-Presentation-Kit.html

 

How Private Money Drives Successful Real Estate Investing

by Simon Macharia

In order to drive your real estate investing business to the next level of success, it is necessary to do most if not all, good deals that come your way. This is made possible by having a ready supply of cash you can use whenever you need it. This article looks at why you need private money to finance your real estate investing deals as opposed to other types of financing.

In order to drive your real estate investing business to the next level of success, it is necessary to do most if not all, good deals that come your way. This is made possible by having a ready supply of cash you can use whenever you need it. This article looks at why you need private money to finance your real estate investing deals as opposed to other types of financing.

In the current downward real estate market, most lenders have tightened their lending underwriting requirements. Currently, you need a good credit and verifiable income to qualify for a mortgage. If you are self employed, such as real estate investors, chances are you cannot qualify for traditional financing by getting a mortgage to do your deals.

For those who can qualify for a mortgage, you can only do a few deals financed through banks. As a real estate investor, you must be able to do any type of deals without limitations to succeed in the business.
And even if you can qualify for a mortgage, there are lots of deals you cannot do if they do not meet the lender's requirements.

Nowadays, a lot of hard money lenders have also tightened their lending requirements, with some having some credit score requirements to lend money.

This means that your real estate investing business is limited by financing more than ever before.
Private money solves this problem because it removes most of the hassles imposed by other means of financing real estate investing deals.

Once you have located a good source of private money, the sky is the limit. First, you are the one who determines which deals to do and which ones not to do. If the numbers make sense to you, then the deal is as good as done. If you like it, chances are that you can have it funded by your private money lenders.

For example, you can do deals that involve buying properties subject to the existing mortgage, such as lease to own or rent to own. Such deals cannot be financed through a traditional mortgage or hard money lenders.
This means that deals that are out of reach to other real estate investors are within your reach.

Secondly, some deals require speed to make them happen. If you already have private money investors lined up, you can have your deals funded within a few days. A house going through foreclosure may be out of reach when you have to go through hoops to get financing. With private money, you can close any deal with the speed required to make it happen.

Thirdly, private money is cheap. Even though private money investors get a higher return on their investment than traditional lending, the cost of getting private money is still less than hard money, or seeking a partner.
To sum it up, with private money, you have a cheap source of ready cash available to finance most, if not all, of your estate investing deals at a short notice.

Successful real estate investing must be driven by a ready supply of private cash available from private money lenders. Targeting these lenders requires that you convince them that their money is safely invested in your deals. Learn how you can attract investing cash through a private money website.

How to Attract Private Money Lenders for Real Estate Investing

By Simon Maracharia

In the current real estate market, it is becoming more and more difficult to get financing for real estate investing deals. For this reason, attracting private money is has become more important than ever before. This article gives you a few pointers you can use to attract private money to finance your real estate investing deals.
In the current real estate market, it is becoming more and more difficult to get financing for real estate investing deals.
For this reason, attracting private money is has become more important than ever before. This article gives you a few pointers you can use to attract private money to finance your real estate investing deals.
Depending on getting a mortgage for your real estate investing deals has become a tight game. Fannie Mae and Freddie Mac will not lend for real estate investing deals.
Even hard money has become tough to get. If you do get a hard money loan, you could end up paying as much as 25% in interest and points.
It is therefore more important than ever before to attract private money lenders or investors. In some cases, only one private money investor is enough for your deals, sometimes you need more than one.
So how do you attract private money investors?
1) Get a good real estate investing website.
The first private money investor I had found me on the internet through my private money real estate investor website.
A good real estate investor website tells your story for you and convinces potential private money investors that their money is safe when invested in your deals.
Before they even get to talk to you, they already know most of the details they need to lend you money. They know how you work, and what remains is presenting your deals as you get them.
And when you present yourself to them in person or hand out business cards, your website becomes the most important presentation kit to potential private money lenders.
A good real estate investing website is recommended at the foot of this article.
2) Group presentations
Depending on your comfort level, you can do group presentations to several potential private money lenders. This can get you several private money investors at once and can be a very powerful way of attracting private money.
3) One on one presentations
Chances are that you must meet all your private money lenders. A one on one meeting is easy to organize and manage. I'd recommend you meet in a restaurant for a meal or breakfast where you present your program's details and benefits.
This keeps the presentation less formal and intimidating as compared to a group of people.
4) Word of mouth
If you are doing many deals and find that you need more private money lenders, your existing private money lenders probably know friends they can recommend to you.
Whenever someone accepts to become a private money lender, you ask them how much money they have to invest in your deals. You can therefore tell if you will need to look for more private money lenders, or if only one will be enough for you.
Do not hesitate to ask if they have friends they can recommend who would like to invest their money in real estate.
5) Existing private money lenders
As long as your existing private money lenders are getting a good return on their investment, chances are they will be more than happy to invest in more of your real estate investing deals.
Do not hesitate to present more real estate investing deals as they become available; you might not need to look for more private money investors.
Successful real estate investing must be driven by a ready supply of private cash available from private money lenders. Targeting these lenders requires that you convince them that their money is safely invested in your deals. Learn how you can attract investing cash through a private money website..

How to Identify Potential Private Money Investors for Real Estate Investing

By Simon Marachia

Probably the biggest problem most real estate investors face is to identify people with money who can finance their real estate investing deals as private money investors. Once you have identified these private money investors, they can finance your deals whenever you identify them. This article walks you through how to identify potential private money lenders for your deals.

One of the biggest questions most real estate investors is how they can identify people with money that are looking to invest in real estate. Once you have private money investors identified, your deals will be funded whenever you identify them.

This article walks you through how to identify potential private money lenders for your deals.  Whether you have great credit or lots of cash for your real estate deals, you will soon find yourself unable to do another deals due to lack of cash. This applies whether you do creative financing for your deals or not.  Therefore, a reliable source of cold hard cash is a must even on short notice. Money must never be your limiting factor if you are to be successful in real estate investing. It is therefore important to identify potential private money lenders for your deals.  Here are the steps you need to follow to attract potential private money investors for your real estate investing business:

1) Get a private money investor website. This must be the first thing on your priority list. Today, everyone will look you up online. Your website presents you to potential private money investors and tells your story for you. By the time you get to talk to them, they are already warmed up ready to do business. A good private money website comes with pre-loaded content personalized for your business to convince potential lenders that they should invest in your deals.

2) Look up mortgage documents. Most court houses now have online access where you can access property information including mortgage information online. If you cannot access them online, you have to visit your local county courthouse to perform a search. The courthouse clerks will prove to be a big help in this process. Look for mortgages done by individuals, not companies. Individual lien holders could be people who have sold owner financed properties, or private money investors. Take their full contact information. The first thing you need to do is send them a letter explaining to them what you do and that you are looking for private money investors for a high return on their investment. Make sure you provide your website address and full contact information.
Secondly, if you have a phone number, you may need to give them a call after week or so to follow up with your letter. Of course, you will call the people that have not given you a call or signed up from your website.

How to Approach Private Money Investors for Real Estate Investing

By Simon Marcharia

In order to be successful in real estate investing business, it is necessary to have access to unlimited funds in the form of private money. Once you have your money lined up, you can finance as many deals as you need with no limitations. This means you must identify potential private money lenders and convince them to invest in your deals. This is where most real estate investors get nervous. This article covers how to approach potential private money investors and sell your ideas to them.

Access to private money is crucial to success in the real estate investing business. Once you have your money lined up, you can finance as many deals as you need with no limitations.

It follows that you must approach potential private money lenders and convince them to lend you their money for your deals. This is where most real estate investors get nervous.

This article covers how to approach potential private money investors and sell your ideas to them.
Once you have some potential private money lenders narrowed down, you then convince them to invest their money in your deals. You will be presenting your deals to them for funding whenever you get them.
Lots of real estate investors first look for deals before they can approach potential private money investors. Even though this is safe, you could lose the deals before you can get them funded. You might also have to leave out lots of good deals untouched.

Also, if you are using a broker to help you find deals, they are unlikely to spend their time working for you unless they know you have the money to make the deals happen. Once they know you have private money lined out, they can start working for you.

For this reason, it is better to approach potential private money investors before you have deals that need financing.  As much as this method might sound aggressive, it gets you better results.

It is important to be prepared to convince potential private money lenders:

1) Get a private money lenders website
This must be your first step. Even though you will talk to all your private money investors, you need them to learn about you as much as possible. A good private money investor website will help break the ice for you and tell them your story before you talk to them. By the time you talk to them, you will be done with basics and discuss deals you may have for funding. You can also present the deals you have on your website. A good website is recommended at the end of this article.

2) Draft a convincing sales letter
Next you need to contact potential private money lenders assuming you have already identified some. This part can be tricky.  The letter you send them must be strong to provoke their interest without being aggressive, and a call to action that gets them to call you or sign up on your website. For this reason, you need to spend some time drafting a good sales letter. Such a letter can be only one to two pages but needs to be provoking without being aggressive. Always provide your website address, as well as your full contact information in your sales letter. If you are so inclined, you may also want to follow up with a phone call if you have their number. They will probably already know who you are if they received your letter.

3) Present your deals
Your next step will be to finance your deals as you present them.
You have to present all the numbers and hopefully get yourself funded.
Successful real estate investors need to have a ready source of private money to finance their deals whenever they need to. A real estate website that targets private money lenders and convinces them to invest in your deals is therefore necessary for your business. Find out how a private money investor website can super charge your real estate investing business.

How To Finance Reos & Shortsales With Private Money

In today's real estate market, it is no longer easy to obtain hard money like it used to be a few years ago. Some hard money lenders have gone belly up, while the ones in business have tightened their underwriting procedures. Before they can finance you, you have to make advance payments in points and high interest rates. This means less profits. Most even need good credit to lend hard money nowadays! This has stopped a lot of real estate investors from doing deals they once used to finance with hard money. This article shows you how to use private money to finance REOs and short sales.

In today's real estate market, it is no longer easy to obtain hard money like it used to be a few years ago. Some hard money lenders have gone belly up, while the ones in business have tightened their underwriting procedures.

Before you get funded, you have to make payments in points plus other fees in addition to high interest rates. Your profits are therefore drastically affected. Most even need good credit to lend hard money nowadays!
Most real estate investors no longer do the deals they used to finance with hard money because of this. This article shows you how to use private money to finance REOs and short sales.

When buying a property, you must show the bank proof of funds before they can allow it to go through. A letter from a hard money lender used to act as proof of funds. Your proof of funds can be your private money source.

If you are a wholesale real estate investor, the process will work the same except source of funds will be private money. In this case, you cannot assign a contract to your investor buyer. You have to buy and sell the property through simultaneous closing.

Here's how the process works.

1) Identify the right property. You need a good amount of profit to do a simultaneous closing. This is because you must pay some closing costs both when buying and selling the property. These fees can add up and eat up your profit.  I prefer to have at least $10,000 for such a transaction.

2) Identify your wholesale buyer. The wholesale buyer buys the property from you, sometimes a real estate investor. These properties are usually sold at wholesale prices. Make sure the buyer shows you proof of funds or the deal might not close! The contract you sign with them will be the regular purchase/sale agreement where they buy the property from you.  Your selling price will of course be higher than your buying price.

3) Get your private money to the title company
Get the private money investor wire the money to the title company. The first transaction will be closed using this money. The cost of this transactional funding should be about 1-2%.

4) Your title company closes the two deals. At closing, your profit is the difference between your selling price and your buying price, less transactional fees and closing costs.

You end up making more money than borrowing from a hard money lender, because your fees are much less. This is how this transaction will work:

$100,000 - after repaired value
$50,000 - bank accepts your short sale offer
$75,000 - price you sell to your buyer
$25,000 your profit at closing

Costs:- $1000 private money fees plus any closing fees

Since you buy houses cash, you get them at a lower price than regular buyers.

You can use this strategy to buy short sale properties and flip them to other investors. Most private money investors would love to lend money this way.

Simply said, the private money buys property from the seller and you sell it the same day to your buyer and walk away with the difference.

Simon Macharia invests in real estate and has done most real estate investing transactions. Learn how a good real estate website can attract private money investors for your business.