Real Estate Financing continued
Private Lenders
Private lenders can be anyone. Some might be friends you already know, either very well or just casually. Some might be relatives. Or they could be business owners, doctors, attorneys, and other professionals you do business with everyday. They don't advertise, and may not even realize they have the potential to make great money until they meet an investor 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, you set the terms and find the deals. Establish your credibility with those who have "deep pockets" and you may never need to worry about conventional investment property loans again. Imagine having access to all the money you need for any estate deal-- you would never miss another deal due to lack of cash! What else would you do if you knew how to attract private lenders?
- Would you be more aggressive in hunting for profitable deals?
- Would you do bigger deals that offer the possibility of greater profits?
- Would you begin buying higher value properties that offer bigger returns?
- Would you leverage the power of your unlimited funds to secure bigger discounts?
- Would you sleep easier at night knowing that your funding needs are taken care of?
- Would you decide to retire early?
Private Real Estate Financing
Discover the Secrets of How to Fund Your Real Estate Deals with Private Lending and NO PERSONAL GUARANTEES! The Private Lender Presentation Kit will make you look professional when you meet with prospective money lenders. Learn exactly what to say to get people excited to lend you CASH!
Alan Cowgill
Learn to Attract Private Money
You too can get all the money you want from people, not banks. You can get it faster and easier, with no limit on how much you can borrow. Alan Cowgill is America’s #1 authority on attracting private money. In his Premium Private Lending Made Easy System, he teaches you how to never again lose a deal because you can’t finance it fast enough! Just think of how many dirt cheap deals you could do if you had access to lots of quick cash—other people's—not out of your own pocket. Seasoned investors don't use banks. Learn their tips, tricks, and techniques in this easy-to-follow Premium Private Lending Made Easy System. Never again let your potential to be stifled by the rules and limitations of banks and hard-money lenders!
5 Advantages of Private Money Over
Hard Money Loans or a Mortgage Loan
For real estate investors, there are numerous benefits and advantages to private real estate money versus hard money loans or mortgage loans to fund your real estate investing business. Knowing the advantages can mean the difference between making a real estate deal work or losing a good deal to your competitors. As the credit bubble continues to burst, traditional sources of investment property loans are drying up and real estate investors need to find alternative sources of capital such as private real estate money.
Advantage #1: Speed and Cash Flow: The ability to close a real estate deal in less than two weeks is a huge advantage over having to wait weeks or even months for a typical bank's mortgage finance approval. The importance of speed cannot be overstated in a competitive market and quick cash gives you a big edge over other investors. Imagine if you are the seller and someone comes to you to buy your house and has a two or three month escrow period before closing, plus several financing contingencies, versus another investors who will close in two weeks with no contingencies. Not hard to tell which offer the seller will accept! And the real power of this offer is the seller may accept a lower price to close quickly with no contingencies. So not only do you get the deal from the other investor, but you get it at a lower price. The power of private real estate financing is the ability to close quickly and drive better deals terms to your advantage.
Advantage #1: Speed and Cash Flow: The ability to close a real estate deal in less than two weeks is a huge advantage over having to wait weeks or even months for a typical bank's mortgage finance approval. The importance of speed cannot be overstated in a competitive market and quick cash gives you a big edge over other investors. Imagine if you are the seller and someone comes to you to buy your house and has a two or three month escrow period before closing, plus several financing contingencies, versus another investors who will close in two weeks with no contingencies. Not hard to tell which offer the seller will accept! And the real power of this offer is the seller may accept a lower price to close quickly with no contingencies. So not only do you get the deal from the other investor, but you get it at a lower price. The power of private real estate financing is the ability to close quickly and drive better deals terms to your advantage.
Advantage #2: Simple Paperwork: Have you ever gone to a closing on a traditional mortgage loan and had to sign 2 inches of paper work? Now image going to closing and only signing two or three documents (yes that is not misprint). Private real estate money deals are incredible simple and the total paperwork is normally less than 10 pages and includes two or three simple documents. The documents included in a private real estate money transaction are a mortgage (Deed of Trust), an installment note and possible a disclosure statement. The only other required paper work is to name your lender on your property insurance as you would in any normal loan situation.
Advantage #3: You Control Terms and Conditions: One of the incredible advantages of a private real estate money transaction is you control the terms and conditions of the loan. For example, you can offer a very short term loan of only 6 months if you know you are going to flip the property for quick profit. Or you can offer a 5 or 10 year term if you plan on holding the property for a long term rental or are seeking commercial property loans. You can also control the conditions of the loan such as not allowing a prepayment penalty for early prepayment. Most normal mortgages and hard money loans require a 1% to 10% prepayment penalty to pay a loan off early. With a private lending transaction, you control the conditions and can simply add a clause that allows an early prepayment without a penalty. That can mean a huge savings down the road.
Advantage #3: You Control Terms and Conditions: One of the incredible advantages of a private real estate money transaction is you control the terms and conditions of the loan. For example, you can offer a very short term loan of only 6 months if you know you are going to flip the property for quick profit. Or you can offer a 5 or 10 year term if you plan on holding the property for a long term rental or are seeking commercial property loans. You can also control the conditions of the loan such as not allowing a prepayment penalty for early prepayment. Most normal mortgages and hard money loans require a 1% to 10% prepayment penalty to pay a loan off early. With a private lending transaction, you control the conditions and can simply add a clause that allows an early prepayment without a penalty. That can mean a huge savings down the road.
Investment Property Loans
The fastest, easiest, and most lucrative way to fund your real estate investments is through Private Money and two young guys, Patrick Riddell and Trevor Mauch, have mastered the art of "getting private money." These two real-time, real-world investors have raised just over $6 Million dollars in Private Money to buy, sell, and flip 127 properties in the past 6 years. Pretty impressive! Read more about this exclusive Private Money Blueprint and you can learn their secrets.
Advantage #4: Reduced Fees and Costs: Most hard money loans ultimately have a total interest cost of 20% or greater by the time you factor in all the fees, points, interest and other costs. Even mortgage finance loans can be very costly with fees and upfront points factored in and the high interest rates most investors must pay versus home owners. Investment property loans from private real estate money sources usually have no points and very few costs. The total cost of most private loans is somewhere in the 9% to 15% range with little upfront or back-end fees.
Advantage #5: Flexibility: Private real estate money provides tremendous flexibility for both you the borrower, but also for the private lender. The private lender can invest small amounts of $5,000 or less in deals or large amounts to fund larger apartments or commercial property loans. You can also work with lenders to structure a term that fits the lenders needs.
Advantage #5: Flexibility: Private real estate money provides tremendous flexibility for both you the borrower, but also for the private lender. The private lender can invest small amounts of $5,000 or less in deals or large amounts to fund larger apartments or commercial property loans. You can also work with lenders to structure a term that fits the lenders needs.
7 Master Skills of Highly Successful Investors
Be a Successful Real Estate Investor
Why is it that some investors can consistently close four deals a month while other investors struggle to find their first deal? Over the past ten years we’ve worked with thousands of investors, both seasoned experts and beginning investors, and we’ve made a startling discovery: The successful investors all have developed seven core skills and honed these skills to a fine edge! The investors who had mastered these skills were making more money- as much as ten times more than our other students - with the exact same effort!Click here to learn more about the 7 Master Skills here!
Separating Your Business Credit from Your Personal Credit
When you use personal money or credit scores to secure funding for your business, you become personally liable for all your business debt. If the business fails, then your personal credit gets destroyed too. So it's very important to establish business credit completely separate from your personal credit. The key is finding companies that are willing to be the first to grant you credit and also report to the business credit bureaus.
Consider creating a credit profile. The top credit agency for small businesses is Dun & Bradstreet (D&B). Basically, you complete a credit profile with them through a service called CreditBuilder; you then get a DUNS number, which is what third-parties will request when they do a credit check. All in all, the process is pretty easy but will cost you a few hundred dollars. Make sure the companies you plan to do business with actually use D&B reporting information, otherwise, you could spend money to build a business credit profile that nobody needs or consults.
Keep in mind that it's important to periodically update your business credit file. An incomplete file is often a red flag. Be diligent about paying on time so as not to damage your newly forming credit history. D&B has a so-called PAYDEX score, which is an indication of how timely you are with payments. This ranges from 1 to 100, and a PAYDEX score above 70 is considered strong. Interestingly enough, a way to improve your score is to pay bills before they are due.
Setup business accounts with business-related services such as UPS and Staples. This will help build your business credit history. You can also do the same with your land line and cell phone service. Obtaining a credit card in a business name for gas purchases is also a good idea but you must pay it in full each month.
Like it or not, when you first start a business your personal credit is what is used to determine the types of credit, if any, that will be extended to your business. As you start to build your business credit, though, relying on your personal credit will phase out. So it is important to start the process of establishing business credit sooner than later. Watch a video here about getting money for your business WITHOUT using your personal credit! https://m747.infusionsoft.com/go/bci201/RedwdCrk
Consider creating a credit profile. The top credit agency for small businesses is Dun & Bradstreet (D&B). Basically, you complete a credit profile with them through a service called CreditBuilder; you then get a DUNS number, which is what third-parties will request when they do a credit check. All in all, the process is pretty easy but will cost you a few hundred dollars. Make sure the companies you plan to do business with actually use D&B reporting information, otherwise, you could spend money to build a business credit profile that nobody needs or consults.
Keep in mind that it's important to periodically update your business credit file. An incomplete file is often a red flag. Be diligent about paying on time so as not to damage your newly forming credit history. D&B has a so-called PAYDEX score, which is an indication of how timely you are with payments. This ranges from 1 to 100, and a PAYDEX score above 70 is considered strong. Interestingly enough, a way to improve your score is to pay bills before they are due.
Setup business accounts with business-related services such as UPS and Staples. This will help build your business credit history. You can also do the same with your land line and cell phone service. Obtaining a credit card in a business name for gas purchases is also a good idea but you must pay it in full each month.
Like it or not, when you first start a business your personal credit is what is used to determine the types of credit, if any, that will be extended to your business. As you start to build your business credit, though, relying on your personal credit will phase out. So it is important to start the process of establishing business credit sooner than later. Watch a video here about getting money for your business WITHOUT using your personal credit! https://m747.infusionsoft.com/go/bci201/RedwdCrk
Know your score before applying for real estate financing!