Private Money For Real Estate Investing - Why You Should Never Forget This Clause

When you use private money for real estate investing there are several clauses your lending agreements should never be without. One of those clauses is the ?No Pre-Payment Penalty? clause. Here?s how it works.

When you borrow private money for real estate investing, you?re accomplishing a great deal. You?re protecting your credit, and maximizing your borrowing potential, as well as gaining access to a ready and flexible source of money.

It would be a shame to go through all of that and leave yourself open to harm in one critical area? what if you?re stuck with a repayment term that?s too long?

The sure way to avoid this issue is to put a ?No Pre-Payment Penalty? clause in every private money for real estate investing agreement you make. That way, when you?re ready to pay the loan off and free up those funds for a new investment, you?re not stuck paying a hefty penalty.

Here?s how the clause should be worded.

?”The Borrower reserves the right to prepay this Note (in whole or in part) prior to the due date with no prepayment penalty”

Without this clause, you would be obligated to pay the lender the full interest due on the loan for the entire term, no matter how long it is. That?s not the kind of flexibility you want in a loan of this type, and flexibility is one of the main reasons to use private money for real estate investing.

Protect yourself and your borrowing capacity when you’re accessing private money for real estate investing by including the above clause in every one of your private notes and contracts. You?ll be glad you did.

How To Benefit From 401 And Real Estate Investing

When people think about their 401K they consider a lump sum of money that has been put away for retirement.

In fact most people completely forget about their 401K until income tax time. Which is a shame because this can be a great source for funding real estate investing.

Creative real estate investors have figured out that 401K and real estate investing have a mutually beneficial relationship. By now you are probably wondering what 401K and real estate investing could possibly have in common. The answer is that the two have several things in common. Each of these should be of interest to you if you are a current real estate investor or you are considering becoming involved with real estate investing.

The easiest way that 401K and real estate investing can work together is through the ability to take out a loan against a 401K. The primary objective with real estate investing is to use little or none of your personal money to fund the investment.

Since you are allowed to borrow against your 401K, you can use this to finance part of your investment into real estate. When the deal closes, you will receive back the amount you borrowed plus more. You can easily pay back the loan without affecting your 401K.

There are some things to note about this method of 401K and real estate investing. First, you should know that there is a cap on the amount you can borrow against your 401K. This amount is usually $50,000. However, it can be less, depending on the amount of money you have in your 401K. Another thing to note about 401K and real estate investing is that the real estate you purchase through this means is not eligible for the mortgage-interest tax deduction. There are no tax benefits when you use 401K and real estate investing together.

Another option for using 401K and real estate investing together is to put the money into an IRA, or individual retirement account. Sometimes this is not allowed, but it if is allowed, you have more flexibility on what you can do with the money. You might receive a penalty for moving your money from 401K. The penalty is usually worth it considering the benefits that are made through real estate investing.

If you are weary of the risks involved with 401K and real estate investing there is a safer way to invest in real estate with your 401K. Some plans offer the option to invest in real estate investment trusts. These trusts consist of companies that buy and sell real estate.

This is less risk way of using 401K and real estate investing. It also requires less work on the part of the investor since the trust companies are the ones actually doing the real estate investing.

Most people are unaware of the possibilities that exist with 401K and real estate investing. It is a creative way for investors to make a profit in real estate without actually using their own money. The good thing about 401K and real estate investing is that there are both safe and risky ways of investing to yield a profit. The decision you make is one entirely of personal preference.

About the Author:

Did you know there are an estimated 8 million plots of unclaimed land and real estate in this country? Download a free ebook, that shows you how to claim your share here: http:Claim Free Land & Property Ebook

Using your 401k for Real Estate Investing

When people think about their 401k, they consider a lump sum of money that has been put away for retirement. In fact, most people completely forget about their 401k until income tax time. Creative real estate investors, however, have figured out that their 401k’s and real estate investing have a mutually beneficial relationship.

So with that being said, you are probably wondering how a savvy investor can use one for the other.

The easiest way that 401k and real estate investing can work together is through the ability to take out a loan against a 401k. The primary objective with real estate investing is to use little or none of your own personal money to fund the investment. Since you are allowed to borrow against your 401k, you can use this to finance part of your investment. When the deal closes, you will receive the amount you borrowed and then some. You can then easily pay back the loan without affecting your 401k. So, basically, it’s like a short term loan you make against yourself. You have access to the funds needed for investing, it doesn’t technically come directly out of your pocket, and when you finally cash in your profits, you simply pay yourself back.

There are some things to note about this method of investing, however. First, you should know that there is a cap on the amount you can borrow against your 401k. This amount is usually $50,000. However, it can be less, depending on the amount of money you actually have in your 401k. Another thing to note is that the real estate you purchase through this method is not eligible for the mortgage-interest tax deduction. There are no tax benefits when you use 401k to finance a portion of any real estate related transaction.

Another option for is to put the money into an IRA, or individual retirement account. Sometimes this is not allowed, but it if is, you will have more flexibility on what you can do with the money. You might receive a penalty for moving your money from your 401K. However, the penalty is usually worth considering given the benefits you would receive through real estate investing. Just keep in mind, the main objective is to only borrower the money for a certain period of time. As you wrap up each deal, its imperative that you repay yourself, and only hold onto the remainder of the profit.

If you are weary of the risks involved, there is a safer way to invest in real estate by using your 401k. Some plans offer the option to invest in real estate investment trusts. These trusts consist of companies that buy and sell real estate, which is a much less risky way of investing in real estate. It also requires less work on the part of the investor since the trust companies are the ones actually doing the real estate investing.

Most people are unaware of the many possibilities that exist by using their 401k’s to invest in real estate. It is a creative way for investors to make a profit in real estate without actually using their own money. The best part about it is that there are both safe and risky ways of investing with this money to yield a profit. The decision you make is one entirely of personal preference.

About the Author

Tabitha Naylor is an experienced mortgage broker/consultant with Apex Financial Mortgage. For more information, or additional resources on home loans, visit Apex Financial Mortgage

Private Money For Real Estate Investing - Get Confident - Get Flexible!

What?s so great about having private money for real estate investing? Have you ever looked a fantastic deal square in the eye and had to walk away because you weren?t in a position to move on it? If so, ready access to private money could have made the difference.

Having a reliable supply of private money for real estate investing gives you two things you need to be super-successful? confidence and flexibility. Let?s see why?

First, imagine that your marketing is working like it should, and you?re getting calls from highly motivated sellers anxious to get out from under their property. Further, let?s assume you?re already in the middle of a deal or two, and you have, say, a quarter of a million dollars tied up for the next few months.

You get a call from Mr. Gotta Getoutnow, who has already moved and is shouldering two huge house payments. His vacant house, valued conservatively at $190,000, is costing him a cool $1200 each month? and he hasn?t lived in it for 6 months! He?s willing ? even anxious - to let it go, if you?ll just cash him out of his mortgage to the tune of $132,000.

Unfortunately, your marginal credit rating won?t permit another loan, your cash is tapped, and your house is already mortgaged to the hilt for those other deals you?ve got working. How much confidence do you have on the phone with Mr. Getoutnow? My guess? not much! But how much could you have if you knew you had access to a half million or so in private money for real estate investing?

See the difference? I thought so!

Now, when you get his call, instead of hemming and hawing about some nebulous ?creative acquisition techniques? you?ve used successfully in the past, trying to impress him with your vast knowledge and experience, you simply tell Mr. Getoutnow, ?I?ll be right over,? and off you go to get the house under contract. You have the confidence to do this because you know, comfortably resting in your hip pocket, is all the private money for real estate investing you could possibly need!

What about flexibility? How does private money for real estate investing give you that?

The answer is in the options private money for real estate investing gives you. Let?s face it, the number one stress inducer in real estate ? other than tenants ? has got to be obtaining financing and working with lenders. Why? Because they want so much freakin? information, that?s why.

If you?re like me, you can?t stand filling out all those forms banks ask you to fill out. What could they possibly need all that information for anyway? I mean, come on. It?s a loan, here?s the property, it?s worth $150k, I need a loan for $100K, what?s the problem? When you have private money for real estate investing, you don?t fill out forms!

Not only that, but what?s up with those lenders having to hammer my credit report every time I get a loan? First there?s an inquiry, then they add the loan to my list of debts, so the whole world knows my business. I?m definitely NOT down with that. Now that I have all the private money for real estate investing I could possibly need, there?s no hits on my credit report, and nobody ever sees the debt listed. I don?t have to worry the next time I go to apply for a car loan that I?m going to have to answer a whole bunch of stupid, embarrassing questions. I?m a happy guy!

Heck, I?m just about the most confident, flexible guy in town, thanks to my ability to raise private money for real estate investing! I can?t say this strongly enough?

You?ve got to figure out how to get some of your own!

For more information, and a more in-depth article, visit Private Money For Real Estate Investing on my website.

Now, go make more offers!

Private Money Real Estate Investing - One Clause You Should Never Forget

When you use private money for real estate investing there are several clauses your lending agreements should never be without. One of those clauses is the ?Substitution of Collateral? clause. Here?s how it works.

Wouldn?t it be great to be able to just swap one property for another on your mortgages? Of course it would, and when you use private money for real estate investing, you can? just by including one little clause in your private lender?s notes.

Here?s how the clause would read.

“Borrower reserves the right to substitute like collateral of equal or greater value” Did you see what just happened? By inserting one tiny little phrase in your private notes, you?ve created a scenario where you don?t have to pay off your loan and get a new one every time you sell and buy property. The flexibility and power this one little clause will give you is outstanding. Suppose you own a duplex that you used private money for real estate investing to obtain, but now you have the opportunity to sell at a large profit. Instead of worrying about the hassle of paying off the note and getting a new loan for your next property, why not just go out and find an equal or greater value property to invest that money in.

Once you finalize the transaction, it?s important that you file your lender?s security against the property with the appropriate government agency, normally your county clerk. Your lender will most likely insist on having a mortgage or deed of trust on file to protect their interest.

The flexibility and leverage this clause gives you is yet another great reason why using private money for your real estate investments is a wise idea.

Your investor will be happy to keep his money working, and you will too. It?s a win-win for both of you, and it?s possible because you thought to include a ?Substitution of Collateral? clause in your private money for real estate investing note. For more information visit http://www.private-money-real-estate-investing.com

Smart? very smart.

Private Money For Real Estate Investing - Get Confident - Get Flexible!

What?s so great about having private money for real estate investing? Have you ever looked a fantastic deal square in the eye and had to walk away because you weren?t in a position to move on it? If so, ready access to private money could have made the difference.

Having a reliable supply of private money for real estate investing gives you two things you need to be super-successful? confidence and flexibility. Let?s see why?

First, imagine that your marketing is working like it should, and you?re getting calls from highly motivated sellers anxious to get out from under their property. Further, let?s assume you?re already in the middle of a deal or two, and you have, say, a quarter of a million dollars tied up for the next few months.

You get a call from Mr. Gotta Getoutnow, who has already moved and is shouldering two huge house payments. His vacant house, valued conservatively at $190,000, is costing him a cool $1200 each month? and he hasn?t lived in it for 6 months! He?s willing ? even anxious - to let it go, if you?ll just cash him out of his mortgage to the tune of $132,000.

Unfortunately, your marginal credit rating won?t permit another loan, your cash is tapped, and your house is already mortgaged to the hilt for those other deals you?ve got working. How much confidence do you have on the phone with Mr. Getoutnow? My guess? not much! But how much could you have if you knew you had access to a half million or so in private money for real estate investing?

See the difference? I thought so!

Now, when you get his call, instead of hemming and hawing about some nebulous ?creative acquisition techniques? you?ve used successfully in the past, trying to impress him with your vast knowledge and experience, you simply tell Mr. Getoutnow, ?I?ll be right over,? and off you go to get the house under contract. You have the confidence to do this because you know, comfortably resting in your hip pocket, is all the private money for real estate investing you could possibly need!

What about flexibility? How does private money for real estate investing give you that?

The answer is in the options private money for real estate investing gives you. Let?s face it, the number one stress inducer in real estate ? other than tenants ? has got to be obtaining financing and working with lenders. Why? Because they want so much freakin? information, that?s why.

If you?re like me, you can?t stand filling out all those forms banks ask you to fill out. What could they possibly need all that information for anyway? I mean, come on. It?s a loan, here?s the property, it?s worth $150k, I need a loan for $100K, what?s the problem? When you have private money for real estate investing, you don?t fill out forms!

Not only that, but what?s up with those lenders having to hammer my credit report every time I get a loan? First there?s an inquiry, then they add the loan to my list of debts, so the whole world knows my business. I?m definitely NOT down with that. Now that I have all the private money for real estate investing I could possibly need, there?s no hits on my credit report, and nobody ever sees the debt listed. I don?t have to worry the next time I go to apply for a car loan that I?m going to have to answer a whole bunch of stupid, embarrassing questions. I?m a happy guy!

Heck, I?m just about the most confident, flexible guy in town, thanks to my ability to raise private money for real estate investing! I can?t say this strongly enough?

You?ve got to figure out how to get some of your own!

For more information, and a more in-depth article, visit Private Money For Real Estate Investing on my website.

Now, go make more offers!

Private Money For Real Estate Investing - Why You Should Never Forget This Clause

When you use private money for real estate investing there are several clauses your lending agreements should never be without. One of those clauses is the ?No Pre-Payment Penalty? clause. Here?s how it works.

When you borrow private money for real estate investing, you?re accomplishing a great deal. You?re protecting your credit, and maximizing your borrowing potential, as well as gaining access to a ready and flexible source of money.

It would be a shame to go through all of that and leave yourself open to harm in one critical area? what if you?re stuck with a repayment term that?s too long?

The sure way to avoid this issue is to put a ?No Pre-Payment Penalty? clause in every private money for real estate investing agreement you make. That way, when you?re ready to pay the loan off and free up those funds for a new investment, you?re not stuck paying a hefty penalty.

Here?s how the clause should be worded.

?”The Borrower reserves the right to prepay this Note (in whole or in part) prior to the due date with no prepayment penalty”

Without this clause, you would be obligated to pay the lender the full interest due on the loan for the entire term, no matter how long it is. That?s not the kind of flexibility you want in a loan of this type, and flexibility is one of the main reasons to use private money for real estate investing.

Protect yourself and your borrowing capacity when you’re accessing private money for real estate investing by including the above clause in every one of your private notes and contracts. You?ll be glad you did.

Private Money For Real Estate Investing - Get Confident - Get Flexible!

What?s so great about having private money for real estate investing? Have you ever looked a fantastic deal square in the eye and had to walk away because you weren?t in a position to move on it? If so, ready access to private money could have made the difference.

Having a reliable supply of private money for real estate investing gives you two things you need to be super-successful? confidence and flexibility. Let?s see why?

First, imagine that your marketing is working like it should, and you?re getting calls from highly motivated sellers anxious to get out from under their property. Further, let?s assume you?re already in the middle of a deal or two, and you have, say, a quarter of a million dollars tied up for the next few months.

You get a call from Mr. Gotta Getoutnow, who has already moved and is shouldering two huge house payments. His vacant house, valued conservatively at $190,000, is costing him a cool $1200 each month? and he hasn?t lived in it for 6 months! He?s willing ? even anxious - to let it go, if you?ll just cash him out of his mortgage to the tune of $132,000.

Unfortunately, your marginal credit rating won?t permit another loan, your cash is tapped, and your house is already mortgaged to the hilt for those other deals you?ve got working. How much confidence do you have on the phone with Mr. Getoutnow? My guess? not much! But how much could you have if you knew you had access to a half million or so in private money for real estate investing?

See the difference? I thought so!

Now, when you get his call, instead of hemming and hawing about some nebulous ?creative acquisition techniques? you?ve used successfully in the past, trying to impress him with your vast knowledge and experience, you simply tell Mr. Getoutnow, ?I?ll be right over,? and off you go to get the house under contract. You have the confidence to do this because you know, comfortably resting in your hip pocket, is all the private money for real estate investing you could possibly need!

What about flexibility? How does private money for real estate investing give you that?

The answer is in the options private money for real estate investing gives you. Let?s face it, the number one stress inducer in real estate ? other than tenants ? has got to be obtaining financing and working with lenders. Why? Because they want so much freakin? information, that?s why.

If you?re like me, you can?t stand filling out all those forms banks ask you to fill out. What could they possibly need all that information for anyway? I mean, come on. It?s a loan, here?s the property, it?s worth $150k, I need a loan for $100K, what?s the problem? When you have private money for real estate investing, you don?t fill out forms!

Not only that, but what?s up with those lenders having to hammer my credit report every time I get a loan? First there?s an inquiry, then they add the loan to my list of debts, so the whole world knows my business. I?m definitely NOT down with that. Now that I have all the private money for real estate investing I could possibly need, there?s no hits on my credit report, and nobody ever sees the debt listed. I don?t have to worry the next time I go to apply for a car loan that I?m going to have to answer a whole bunch of stupid, embarrassing questions. I?m a happy guy!

Heck, I?m just about the most confident, flexible guy in town, thanks to my ability to raise private money for real estate investing! I can?t say this strongly enough?

You?ve got to figure out how to get some of your own!

For more information, and a more in-depth article, visit Private Money For Real Estate Investing on my website.

Now, go make more offers!

Real Estate Investing Strategy: Make Money With Wholesaling

Your exit strategy is an extremely important part of your real estate investing business. In fact, it is one of the most important parts. Sometimes investors get excited because they learn how to buy properties, they find them and they get the money lined up to purchase them. But after the purchase, the excitement dies, as they have no idea what to do with their newly owned properties.

You must know your exit strategy when you buy. What do you plan to do with the property? Knowing this allows you to make all types of decisions, from how much to offer, to what kind of financing to use, and more. One strategy is to incorporate wholesaling into your real estate business plans.

What is Wholesaling?

It is simply finding a bargain property and passing it on to a bargain hunter. That bargain hunter will be an investor who will either purchase the property to resell it or purchase it to hold it for rental income. Your profit as a wholesaler should be between $5000 and $15,000 on each house. In some cases it will be higher than $15,000 and on some deals your profit may be a little lower than $5,000.

Why wholesale?

Real estate investors choose to wholesale properties for a few reasons. They could be:

1. Quick cash - it is possible to turn a property around anywhere from 7 to 45 days and get cash in your pocket. If you need to get your hands on some cash quickly, this would be a reason to wholesale. Or, you may not need the cash immediately. You might just want to build your cash reserves. Wholesaling is a good way to do this quickly.

2. Too many houses - maybe you’re good at finding houses, but you find more than you need or can use at any given time. If this is the case, wholesaling is a smart move for you. You can still profit from your locating skills, even if you aren’t going to keep the property for your own personal portfolio.

3. Flexibility - at any given time, you can determine whether you want to keep a property or sell it. This gives you flexibility as you locate and purchase properties.

An important fact to remember!

Probably the most important thing that you need to remember when you decide to wholesale is: your buyer should get the majority of the profit! This is important because your buyer will be the one to purchase and rehab the property. There has to be enough room in the deal for your buyer to do this and still retain a nice amount of money for cash out and/or equity.

This does not mean that you find properties and give them away for $1,000. Your profit will vary depending on the house, but the better you are at locating properties and putting together offers, the greater your profit will be - while still maintaining an excellent profit for your buyer.

Using your 401k for Real Estate Investing

When people think about their 401k, they consider a lump sum of money that has been put away for retirement. In fact, most people completely forget about their 401k until income tax time. Creative real estate investors, however, have figured out that their 401k’s and real estate investing have a mutually beneficial relationship.

So with that being said, you are probably wondering how a savvy investor can use one for the other.

The easiest way that 401k and real estate investing can work together is through the ability to take out a loan against a 401k. The primary objective with real estate investing is to use little or none of your own personal money to fund the investment. Since you are allowed to borrow against your 401k, you can use this to finance part of your investment. When the deal closes, you will receive the amount you borrowed and then some. You can then easily pay back the loan without affecting your 401k. So, basically, it’s like a short term loan you make against yourself. You have access to the funds needed for investing, it doesn’t technically come directly out of your pocket, and when you finally cash in your profits, you simply pay yourself back.

There are some things to note about this method of investing, however. First, you should know that there is a cap on the amount you can borrow against your 401k. This amount is usually $50,000. However, it can be less, depending on the amount of money you actually have in your 401k. Another thing to note is that the real estate you purchase through this method is not eligible for the mortgage-interest tax deduction. There are no tax benefits when you use 401k to finance a portion of any real estate related transaction.

Another option for is to put the money into an IRA, or individual retirement account. Sometimes this is not allowed, but it if is, you will have more flexibility on what you can do with the money. You might receive a penalty for moving your money from your 401K. However, the penalty is usually worth considering given the benefits you would receive through real estate investing. Just keep in mind, the main objective is to only borrower the money for a certain period of time. As you wrap up each deal, its imperative that you repay yourself, and only hold onto the remainder of the profit.

If you are weary of the risks involved, there is a safer way to invest in real estate by using your 401k. Some plans offer the option to invest in real estate investment trusts. These trusts consist of companies that buy and sell real estate, which is a much less risky way of investing in real estate. It also requires less work on the part of the investor since the trust companies are the ones actually doing the real estate investing.

Most people are unaware of the many possibilities that exist by using their 401k’s to invest in real estate. It is a creative way for investors to make a profit in real estate without actually using their own money. The best part about it is that there are both safe and risky ways of investing with this money to yield a profit. The decision you make is one entirely of personal preference.

About the Author

Tabitha Naylor is an experienced mortgage broker/consultant with Apex Financial Mortgage. For more information, or additional resources on home loans, visit Apex Financial Mortgage

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