Why Use Private Money For Real Estate Investing?

There are many reasons a real estate investor might want to have a ready access to private money for real estate investing. This article will explore a few of those reasons.

The first reason to use private money for real estate investing is to protect your credit rating. Think about this… if you borrow the money from a private individual, rather than a bank or lending institution, the loan will never be reported to the credit bureau. It won’t count against your debt-to-income ratio, and no record of the payment history will be kept. No one will ever know about that loan, unless you tell them.

Next, and one of the very best reasons to use private money for real estate investing, is the elimination of paperwork. I have never had to complete a loan application for private money for real estate investing. The lenders I work with all know me and the kind of investing I do. Many of them never even care to see the property. When I apply for a mortgage, on the other hand, the application process itself can take several days, and there are mountains of paper.

Yet another reason to use private money for real estate investing is the ready access to fast cash. Sometimes, when a deal is especially good, moving super-fast is a necessity. With bank financing, that kind of speed is often impossible. Even lines of credit don’t always give you the same speed capability that private lenders do. With one phone call to one of my private lenders, I can tie up a deal that other investors only dream about.

A great reason to use private money for real estate investing is the leverage that it gives you. Think about this… if you have $50,000 of your own money, is it better to pay all cash for a $50,000 property, or to put $50,000 cash down on a $500,000 property and use private lenders to finance the rest?

If you answered the $500,000 property, you’re right- and here’s why. Let’s say the $50,000 property rents for $500 per month, or $6,000 per year. Your Return On Investment (ROI would be 12% the first year ($6,000 divided by $50,000). It’s safe to assume the rent on the $500,000 property might be about 10 times that of the $50,000 property, or about $60,000 for the year. If your payback to your lender totals $4,000 per month, or $48,000 per year, what’s your Return On Investment (ROI) for the $500,000 property? If you answered 24%, give yourself a gold star!

Of course, you would need to take into account the cost of borrowing the money, but even after doing that, you can see there really is no comparison. Using private money for real estate investing gives you something called leverage. Leverage is the ability to move something very large with something very small… a lever. The lever, in this case, is your small amount of cash ($50,000). With it, you can “move” or control a $500,000 property, because the private lender’s money increases the power of your “lever”.

Here I’ve given you a few of the many great reasons for using private money for real estate investing. There are more, but you should have a clear picture of why private money can be so useful in your real estate investing toolkit. If you would like more information, I have written another article on my website titled Private Money For Real Estate Investing.

Now, go make more offers!

Why Use Private Money For Real Estate Investing?

There are many reasons a real estate investor might want to have a ready access to private money for real estate investing. This article will explore a few of those reasons.

The first reason to use private money for real estate investing is to protect your credit rating. Think about this… if you borrow the money from a private individual, rather than a bank or lending institution, the loan will never be reported to the credit bureau. It won’t count against your debt-to-income ratio, and no record of the payment history will be kept. No one will ever know about that loan, unless you tell them.

Next, and one of the very best reasons to use private money for real estate investing, is the elimination of paperwork. I have never had to complete a loan application for private money for real estate investing. The lenders I work with all know me and the kind of investing I do. Many of them never even care to see the property. When I apply for a mortgage, on the other hand, the application process itself can take several days, and there are mountains of paper.

Yet another reason to use private money for real estate investing is the ready access to fast cash. Sometimes, when a deal is especially good, moving super-fast is a necessity. With bank financing, that kind of speed is often impossible. Even lines of credit don’t always give you the same speed capability that private lenders do. With one phone call to one of my private lenders, I can tie up a deal that other investors only dream about.

A great reason to use private money for real estate investing is the leverage that it gives you. Think about this… if you have $50,000 of your own money, is it better to pay all cash for a $50,000 property, or to put $50,000 cash down on a $500,000 property and use private lenders to finance the rest?

If you answered the $500,000 property, you’re right- and here’s why. Let’s say the $50,000 property rents for $500 per month, or $6,000 per year. Your Return On Investment (ROI would be 12% the first year ($6,000 divided by $50,000). It’s safe to assume the rent on the $500,000 property might be about 10 times that of the $50,000 property, or about $60,000 for the year. If your payback to your lender totals $4,000 per month, or $48,000 per year, what’s your Return On Investment (ROI) for the $500,000 property? If you answered 24%, give yourself a gold star!

Of course, you would need to take into account the cost of borrowing the money, but even after doing that, you can see there really is no comparison. Using private money for real estate investing gives you something called leverage. Leverage is the ability to move something very large with something very small… a lever. The lever, in this case, is your small amount of cash ($50,000). With it, you can “move” or control a $500,000 property, because the private lender’s money increases the power of your “lever”.

Here I’ve given you a few of the many great reasons for using private money for real estate investing. There are more, but you should have a clear picture of why private money can be so useful in your real estate investing toolkit. If you would like more information, I have written another article on my website titled Private Money For Real Estate Investing.

Now, go make more offers!

How To Get Private Money For Real Estate Investing - Step Two

If you spend much time online, you?ve most likely read or heard about the law of attraction. Essentially, this law states that you tend to attract into your life whatever you focus on. I personally think the philosophy that?s risen up surrounding this so-called ?law? is just so much drivel, but there is truth to the central idea. Which brings us to step two for getting private money for real estate investing.

As in most other areas of life, if you don?t know what you?re looking for, neither will anyone else. That?s why it?s important to think carefully about what you?ll be expecting from your lenders once you sign them up. Ask some pertinent questions, write down the answers, and develop a ?Lender Fact Sheet? to give to your prospective private money lenders. Here are some of the questions you should be asking.

1. What size loans will you be looking for? This will be dictated by the type of property you normally buy. If you focus on single family homes in the $75,000 to $150,000 range, then loans up to $150,000 are what you?ll be seeking.

2. What will the terms be? Think carefully about how you will want to pay your loans back. This will, of course, change as you get into the mechanics of each individual loan and each individual property, but your prospective lenders will want to know what your intentions are. Do you plan to use the money for three years, five years, ten years? Will you make interest only payments with a balloon at the end of the term? The terms are limited only by your own creativity, but think about them now, and add them to your outline.

3. What rate will you be paying? A good rate of return compared with what they can earn elsewhere is what will attract your potential private money for real estate investing lenders. The rate you choose is up to you, and will be negotiable based on market conditions, but you should give your prospects a starting figure. Ten percent, eleven percent, twelve percent? Be prepared to make adjustments, but have a place to start.

4. How often? What will be your approximate frequency of use? Lenders want to know that they have a reasonable expectation of return. Don?t sign them up if you can?t use their money, because you?ll just be setting them up for disappointment. Only sign up as many lenders as you can reasonably expect to actually use.

As you think through these questions, others may occur to you. Write them down, along with the answers. Then, use your outline to develop your Lender Fact Sheet. Give this sheet to your prospective private money lenders at your seminars or one-on-one presentations, and be prepared to explain your terms.

If you want more on how to get private money for real estate investing, visit http://www.private-money-real-estate-investing.com for tips, techniques, and strategies.

Why Use Private Money For Real Estate Investing - Reason 2

You can’t judge a book by it’s cover, and you can’t judge a person by their credit score. Unfortunately banks, lenders and other financial institutions do exactly that, often using credit score as a sole determining factor in deciding whether to grant a new loan. Another great reason to use private money for real estate investing is that it won’t negatively impact your credit score. Why not? Read on to find out.

When you borrow money from private individuals, something very important does NOT happen. They do not pull your credit report. Therefore, no inquiry shows up the next time someone DOES pull your credit report. Inquiries can lower your score, and multiple inquiries can have a negative impact on your score and your overall credit picture.

How much of an impact? That depends on who’s reading the credit report, and which of the three reports they’re reading.

One this is certain? all other factors being equal, it’s far better to not have inquiries show up on your report. When you use private money for real estate investing, you avoid the automatic ?inquiry deduction? in your score, as well as the negative assumptions loan officers often make when they see multiple inquiries.

There are plenty of great reasons to use private money for real estate investing, and one of the best is that private lenders don’t pull credit. Of course, that doesn’t mean you NEVER want to pull your own credit report in order to show it to a potential lender, or even invite him to pull it himself. That can be a good strategy, especially when you’re in the process of trying to earn a new lender’s trust.

Once the relationship is established and you’ve paid back a loan or two, they should never need to pull your report again? something no institutional lender I’ve ever worked with has been willing to guarantee. You can see that using private money for real estate investing has some real advantages, one of which is preserving your credit by limiting the number of inquiries on your report.

Why use private money for real estate investing? Plenty of reasons! For more try http://www.private-money-real-estate-investing.com/why-private-money.html

Why Use Private Money For Real Estate Investing - Reason 2

You can’t judge a book by it’s cover, and you can’t judge a person by their credit score. Unfortunately banks, lenders and other financial institutions do exactly that, often using credit score as a sole determining factor in deciding whether to grant a new loan. Another great reason to use private money for real estate investing is that it won’t negatively impact your credit score. Why not? Read on to find out.

When you borrow money from private individuals, something very important does NOT happen. They do not pull your credit report. Therefore, no inquiry shows up the next time someone DOES pull your credit report. Inquiries can lower your score, and multiple inquiries can have a negative impact on your score and your overall credit picture.

How much of an impact? That depends on who’s reading the credit report, and which of the three reports they’re reading.

One this is certain? all other factors being equal, it’s far better to not have inquiries show up on your report. When you use private money for real estate investing, you avoid the automatic ?inquiry deduction? in your score, as well as the negative assumptions loan officers often make when they see multiple inquiries.

There are plenty of great reasons to use private money for real estate investing, and one of the best is that private lenders don’t pull credit. Of course, that doesn’t mean you NEVER want to pull your own credit report in order to show it to a potential lender, or even invite him to pull it himself. That can be a good strategy, especially when you’re in the process of trying to earn a new lender’s trust.

Once the relationship is established and you’ve paid back a loan or two, they should never need to pull your report again? something no institutional lender I’ve ever worked with has been willing to guarantee. You can see that using private money for real estate investing has some real advantages, one of which is preserving your credit by limiting the number of inquiries on your report.

Why use private money for real estate investing? Plenty of reasons! For more try http://www.private-money-real-estate-investing.com/why-private-money.html

Why Use Private Money For Real Estate Investing?

There are many reasons a real estate investor might want to have a ready access to private money for real estate investing. This article will explore a few of those reasons.

The first reason to use private money for real estate investing is to protect your credit rating. Think about this… if you borrow the money from a private individual, rather than a bank or lending institution, the loan will never be reported to the credit bureau. It won’t count against your debt-to-income ratio, and no record of the payment history will be kept. No one will ever know about that loan, unless you tell them.

Next, and one of the very best reasons to use private money for real estate investing, is the elimination of paperwork. I have never had to complete a loan application for private money for real estate investing. The lenders I work with all know me and the kind of investing I do. Many of them never even care to see the property. When I apply for a mortgage, on the other hand, the application process itself can take several days, and there are mountains of paper.

Yet another reason to use private money for real estate investing is the ready access to fast cash. Sometimes, when a deal is especially good, moving super-fast is a necessity. With bank financing, that kind of speed is often impossible. Even lines of credit don’t always give you the same speed capability that private lenders do. With one phone call to one of my private lenders, I can tie up a deal that other investors only dream about.

A great reason to use private money for real estate investing is the leverage that it gives you. Think about this… if you have $50,000 of your own money, is it better to pay all cash for a $50,000 property, or to put $50,000 cash down on a $500,000 property and use private lenders to finance the rest?

If you answered the $500,000 property, you’re right- and here’s why. Let’s say the $50,000 property rents for $500 per month, or $6,000 per year. Your Return On Investment (ROI would be 12% the first year ($6,000 divided by $50,000). It’s safe to assume the rent on the $500,000 property might be about 10 times that of the $50,000 property, or about $60,000 for the year. If your payback to your lender totals $4,000 per month, or $48,000 per year, what’s your Return On Investment (ROI) for the $500,000 property? If you answered 24%, give yourself a gold star!

Of course, you would need to take into account the cost of borrowing the money, but even after doing that, you can see there really is no comparison. Using private money for real estate investing gives you something called leverage. Leverage is the ability to move something very large with something very small… a lever. The lever, in this case, is your small amount of cash ($50,000). With it, you can “move” or control a $500,000 property, because the private lender’s money increases the power of your “lever”.

Here I’ve given you a few of the many great reasons for using private money for real estate investing. There are more, but you should have a clear picture of why private money can be so useful in your real estate investing toolkit. If you would like more information, I have written another article on my website titled Private Money For Real Estate Investing.

Now, go make more offers!

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.

Why Use Private Money For Real Estate Investing?

There are many reasons a real estate investor might want to have a ready access to private money for real estate investing. This article will explore a few of those reasons.

The first reason to use private money for real estate investing is to protect your credit rating. Think about this… if you borrow the money from a private individual, rather than a bank or lending institution, the loan will never be reported to the credit bureau. It won’t count against your debt-to-income ratio, and no record of the payment history will be kept. No one will ever know about that loan, unless you tell them.

Next, and one of the very best reasons to use private money for real estate investing, is the elimination of paperwork. I have never had to complete a loan application for private money for real estate investing. The lenders I work with all know me and the kind of investing I do. Many of them never even care to see the property. When I apply for a mortgage, on the other hand, the application process itself can take several days, and there are mountains of paper.

Yet another reason to use private money for real estate investing is the ready access to fast cash. Sometimes, when a deal is especially good, moving super-fast is a necessity. With bank financing, that kind of speed is often impossible. Even lines of credit don’t always give you the same speed capability that private lenders do. With one phone call to one of my private lenders, I can tie up a deal that other investors only dream about.

A great reason to use private money for real estate investing is the leverage that it gives you. Think about this… if you have $50,000 of your own money, is it better to pay all cash for a $50,000 property, or to put $50,000 cash down on a $500,000 property and use private lenders to finance the rest?

If you answered the $500,000 property, you’re right- and here’s why. Let’s say the $50,000 property rents for $500 per month, or $6,000 per year. Your Return On Investment (ROI would be 12% the first year ($6,000 divided by $50,000). It’s safe to assume the rent on the $500,000 property might be about 10 times that of the $50,000 property, or about $60,000 for the year. If your payback to your lender totals $4,000 per month, or $48,000 per year, what’s your Return On Investment (ROI) for the $500,000 property? If you answered 24%, give yourself a gold star!

Of course, you would need to take into account the cost of borrowing the money, but even after doing that, you can see there really is no comparison. Using private money for real estate investing gives you something called leverage. Leverage is the ability to move something very large with something very small… a lever. The lever, in this case, is your small amount of cash ($50,000). With it, you can “move” or control a $500,000 property, because the private lender’s money increases the power of your “lever”.

Here I’ve given you a few of the many great reasons for using private money for real estate investing. There are more, but you should have a clear picture of why private money can be so useful in your real estate investing toolkit. If you would like more information, I have written another article on my website titled Private Money For Real Estate Investing.

Now, go make more offers!

Why Use Private Money for Real Estate Investing - Reason 3

I met a guy the other day – we’ll call him Stan – who had a tale of woe to tell. It seems Stan had tried to get approved for a loan on a Harley he wanted to buy, only to be told “NO!” by the loan officer, who happened to be young enough to be Stan’s kid. Talk about frustration… and it all could have been avoided with a little judicious use of private money for real estate investing.

You see, Stan is a real estate investor – has been for quite some time – and he has a pretty active credit file. Mortgages going on, mortgages coming off, every time Stan buys or sells a house (which is frequently) his credit gets whacked with a new loan or inquiry. So, now that Stan wants to buy something for himself, he has to kowtow to some obsequious little snot of a loan officer. Poor Stan.

If Stan had simply taken a little time and effort to set up a network of private lenders he wouldn’t be in this predicament. Stan’s credit would be squeaky clean, because private loans don’t show up in a credit report, and private lenders don’t generally pull credit reports.

Private money for real estate investing is like having a golden ticket. Private lenders make their lending decisions based on the relationship they have with you, and based on the quality of the deal, so they don’t need to hit you with a credit inquiry.

That way, when you want to go borrow money for some other purpose, like a boat, a motor home, a car, or, in Stan’s case, a Harley, your credit will be unencumbered by a bunch of mortgages, and available for you to use.

Isn’t that why you’re investing in real estate for in the first place? Extra money for some of the finer things life has to offer? Of course it is, and when the time comes to enjoy some of that hard-won wealth, do you want some snotty-faced kid telling you, “I’m sorry, Mr. Investor, but we can’t grant this loan request?”

I’ll bet I already know the answer to that question. Stan does, too.

Reason 4 to use private money for real estate investing? Keep your valuable credit available for other things.

Now, go make more offers!

Great Source of Private Money For Real Estate Investing

How would it be to have access to over a million dollars in private money for real estate investing? That?s just what a good friend of mine stumbled into when he did a very simple thing? something you can do in an afternoon.

My friend, Jim, has been investing in real estate for several years. One day, after a family get together, he decided to let his family know about his investing. He had been pretty successful with small apartment buildings, so he decided to send out a simple postcard to all the members of his family, telling them to call him if they knew of anyone wanting to sell rental property.

Lo and behold, Jim got a call the very next week from an uncle he barely knew. The uncle didn?t know of any property for sale, but he expressed curiosity in what Jim was doing, so the two men made an appointment to get together for lunch.

At lunch, Jim explained his investing strategy, and outlined some of the successes he had enjoyed. He talked about the simple things in his business, like buying value, and looking for positive cash flow. He enjoyed talking about it, and Jim?s uncle seemed genuinely interested.

Then Jim got the surprise of his life.

As they were leaving, Jim?s uncle leaned into the car window and said, ?Could you use a silent partner to help with the financing end of things??

Jim says, ?I think my heart skipped several beats before I answered.?

After Jim?s heart started again, he told his uncle he?d be happy to put his money to work. It turned out that Jim?s uncle was sitting on nearly $1,000,000 in liquid assets, assets Jim has used over and over again during the last few years to build a rental real estate empire.

The funny thing is, Jim didn?t set out to find relatives with money. He was just looking for some property, and along the way he found one of the greatest private lenders I?ve ever heard about.

What can we take away from this story? Well, you may not have a relative with anywhere near the available cash Jim?s uncle has, but the question is, how do you know? More importantly, how easy would it be to find out? My guess is, pretty easy. Could you find a creative way to ask, and let your family know what you?re doing? Of course you could!

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