When I started in Real Estate, I only knew about getting loans from banks. That is because I was doing it part time and buying places like the ones I lived in. I was not fixing too much, just finding good deals. During those years, I was a part time investor while I pursued my career.
It was not until I was laid off that I started reading every book I could and attending seminars and REI club meetings. That is when I learned about private lenders and used a few.
One of the friends I met at a club meeting put a second loan on one of my rentals and then I refinanced it later and paid him back. I also lent money as a private lender on a condo conversion deal. I ran one or two seminars about private lending and found a few private lenders.
While I was laid off, I was able to get bank loans with my business income but it was getting harder. I even used a few hard money lenders when an investor backed out of a deal and that was very expensive money.
I was about to refinance 5 properties in 2008 when they shut down all lending across the country in August. They were stalling the funding of the loans in late July by asking for all kinds of information, like a business phone number listed in the directories as a business phone with a business address, not a second line in your home office. Then when the news hit I realized, the mortgage brokers knew more than I did. I had 5 worthless appraisals that I had paid for. I realized that I did not want to be stuck in that position again and that I needed to use private lenders on my deals in the future.I realized I needed to use private lenders on my deals Click To Tweet
Later, as I was flipping houses I used a few of those private lenders I had met but did not have time to actively pursue more as I simultaneously looked for deals and managed the remodels. Fast forward to the present when I have 2 partners and and I can focus more on finding the private lenders, our deals close faster, are more flexible and produce higher profits.When I focus more on finding the private lenders, our deals close faster Click To Tweet
What are some of the advantages of using private lenders for your real estate investments? If you haven’t decided whether or not to use private lenders, I have listed all the advantages for you below.
- Fast closings so you can go after deals that need to close quickly
- You set the interest rate and length of the loan which saves you money
- No pulling your credit or arbitrary limits on # of loans you can hold
- Unlimited funds based on how many lenders you have
- You can help friends and family make higher returns on their savings than they get in the bank or the stock market
- You can take some of your profit when you buy to maintain cash flow – less profit comes out when you sell
- Private Lenders are flexible and will change the terms if necessary as well as which property their money is secured by.
- No “junk” fees like underwriting fees, remodel inspection fees, funding fees, or draw fees
- No Points
Choose an advantage to TWEET:To have Private Lenders means Unlimited funds based on how many lenders you have Click To Tweet You can help friends and family make higher returns on their savings than they get in the bank or the stock market Click To Tweet You can make offers with confidence & offer a quick closing as an incentive to the seller Click To Tweet
When a deal comes along you have to move fast. Deals will slip through your fingers while you wait for a bank to approve your loan.Deals will slip through your fingers while you wait for a bank to approve your loan Click To Tweet
And banks don’t understand UnLivable property, -its UnLendable in their book. Once you have private money available, you can make an offer knowing you can go ahead and set a closing date. You can beat out other investors in the competition for deals.
That should be more than enough to convince you to start looking for your own private lenders. To get started, download my ebook on Finding Private Lenders.To find Private Lenders, download my ebook at http://wisewealtuniversity.com/pvlending Click To Tweet