Finding real estate deals these days is easy. Getting an investment property loan to make the purchase is the hard part. Since many people must sell their home or risk losing it to foreclosure, investors are often able to find nice houses priced way under market value. But with the lending situation being so scarce and unreliable, where do you get the money to buy the deals? Conventional banks are still an option if you have steady income that you can prove (W-2 forms from your employer), have a good credit score (680 or higher), and have a large down payment (20% or more). But what if you don’t?

A great many real estate investors are turning to private lenders to fund their purchases. Private lenders can be anyone. They could be friends you already know, either very well or just casually. They could be relatives. Or they could be business owners, doctors, attorneys, and other professionals you do business with everyday. Private lenders by and large don’t advertise, and may not even realize they have the potential to make great money until they meet an investor— like you— who educates them. Since no one is getting a very good rate of return on their money these days, whether it be in a CD, mutual fund, IRA, or in the stock market, many everyday individuals you never thought of before as lenders could have money to lend to you for your real estate deals. It’s a win-win situation: they make a much higher interest rate than they could make elsewhere, and you set the terms you know you can afford.

Imagine how many great deals you could do if you had access to lots of quick cash—other people’s—not out of your own pocket. Imagine never again letting deals pass you by due to the rules and limitations of banks! And also image going to closing and only signing two or three documents instead of two inches worth!  Private real estate money deals are incredible simple and the total paperwork is normally less than 10 pages. In addition, investment property loans from private real estate money sources usually have no points and little upfront or back-end fees. You won’t find that at a conventional bank!

Private real estate money provides tremendous flexibility for both you the borrower, and the private lender. If the idea of private lending is new to you, first educate yourself about this type of real estate financing, and you may never need to worry about conventional investment property loans ever again.

Filed under: Finance

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