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.

Why Use Private Money For Real Estate Investing? Reason 1

I?ll never forget it? my Realtor phoned and breathlessly told me about a deal that was too good to pass up. He described the property and the price and I had to agree- it sounded like a fantastic opportunity. Sadly, I told him I had no ready cash, and my credit was already overextended. I would have to pass. I glumly hung up the phone.

This experience, several years ago, lead me to examine how I was financing my investment properties. Because I was tied in to using my own cash and conventional mortgages, I was severely limited in the number and kind of properties I could acquire. I decided then and there to begin learning all I could about private money for real estate investing.

I gradually began to develop a stable of private investors, partners really, who had money to loan and were ready to make it available to me at a moments notice. Since I started putting the principles of private money for real estate investing to work, I haven?t had to pass on a ?once in a lifetime? deal for financial reasons again.

A perfect example occurred a couple of weeks ago that illustrates what I?m talking about. Again, my realtor phoned and told me about a foreclosure listing he had. The bank had sold the property, but the deal had fallen through. These have always been great opportunities for me, and this was no exception. Thanks to the fact that I have access to plenty of private money for real estate investing, I knew just what to do.

With just a couple of phone calls, I had lined up the financing I needed to proceed with the deal, and I stand to make several thousand dollars on this property when I close on it at the end of the month.

That?s several thousand dollars I would have been forced to watch fly into the pocket of some other investor if I didn?t have ready access to a flexible source of cash, namely my private money lenders. I?ve got several who are friends now, and our deals are always win-win situations for all parties.

If you need another reason to start building a network of lenders who can provide you private money for real estate investing, this is one of the best.

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 - 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.

Why Use Private Money For Real Estate Investing? Reason 1

I?ll never forget it? my Realtor phoned and breathlessly told me about a deal that was too good to pass up. He described the property and the price and I had to agree- it sounded like a fantastic opportunity. Sadly, I told him I had no ready cash, and my credit was already overextended. I would have to pass. I glumly hung up the phone.

This experience, several years ago, lead me to examine how I was financing my investment properties. Because I was tied in to using my own cash and conventional mortgages, I was severely limited in the number and kind of properties I could acquire. I decided then and there to begin learning all I could about private money for real estate investing.

I gradually began to develop a stable of private investors, partners really, who had money to loan and were ready to make it available to me at a moments notice. Since I started putting the principles of private money for real estate investing to work, I haven?t had to pass on a ?once in a lifetime? deal for financial reasons again.

A perfect example occurred a couple of weeks ago that illustrates what I?m talking about. Again, my realtor phoned and told me about a foreclosure listing he had. The bank had sold the property, but the deal had fallen through. These have always been great opportunities for me, and this was no exception. Thanks to the fact that I have access to plenty of private money for real estate investing, I knew just what to do.

With just a couple of phone calls, I had lined up the financing I needed to proceed with the deal, and I stand to make several thousand dollars on this property when I close on it at the end of the month.

That?s several thousand dollars I would have been forced to watch fly into the pocket of some other investor if I didn?t have ready access to a flexible source of cash, namely my private money lenders. I?ve got several who are friends now, and our deals are always win-win situations for all parties.

If you need another reason to start building a network of lenders who can provide you private money for real estate investing, this is one of the best.