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Finding a private money lender is an essential part of any real estate investor’s business. In the old days (pre-2006) you could easily get a mortgage or even hard money loan simply by showing up in the lenders office and filling out an application. If you could walk and talk you qualified for a loan.

But today in the post credit-bubble market those days are over. Getting money for your real estate investing business is much more difficult and likely to get even more difficult as the credit markets sort things out. So how do you get money for your real estate investment business? (more…)

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I recently attended a real estate investment seminar in Las Vegas. Between speeches by different “gurus” I would mingle with other investors and explain that I owned a hard money brokerage firm. Even though it has been around for almost a hundred years now, I was amazed how hard money lenders still seem to be mysterious to many investors. They either did not understand how the hard money lending industry worked or had heard that it was something they should avoid like the plague.

To put it simply, hard money loans are short term loans that are used for various real estate projects. The most common projects are house flipping, but they are also used in commercial construction and land development. (more…)

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Private lending is facilitated by lenders who are not supported or funded by the government. Private lending companies have to register themselves and fulfill certain criteria put forward by the law. Most private lending companies have their individual policies and work culture but are governed by the guidelines put forth by the state and federal governments.

Private lending is popular as borrowers can approach private lenders for certain loans that a government agency might not approve. Many private lending companies in the market specialize in giving credit to applicants with bad credit history. These companies are known as sub-prime lenders. They also have some customized solutions that may help a person with a really bad credit history. Still, the applicant must first check with the regular companies that lend money. There is a possibility that they may be able to offer good rates. (more…)

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Getting private money lenders into your real estate investing business is critical to your success as the credit bubble makes getting traditional mortgages very difficult. Mortgage lenders are now requiring 700+ credit scores and documented sources of income. This can very hard for most real estate investors. Hard money lenders are also drying up as the credit bubble continues to take its toll on borrowers. So how do you get money for real estate deals?

The answer is private money lenders. But how do you get private money lenders?

We teach our students how to use simple marketing techniques to attract private lenders. Once you start to attract private lenders you can set up one-on-one meetings or group meetings where you can lay out the advantages and benefits of investing money with you. (more…)

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Wall Street is in utter turmoil and banks are simply not lending. Our financial system is not functioning and no one knows just how long the problems will last. Commercial real estate property owners, investors and developers are desperate for capital and many don’t know where to turn.

Is anyone still funding commercial mortgage loans anymore? Fortunately, the answer is; yes. With traditional, conventional lenders virtually out of the picture, the private sector has stepped in and is filling the “funding gap” that this crisis of liquidity has created.

Private lenders, to include, hedge funds, private equity firms, wealthy individuals and privately held financial firms, are still making deals and closing loans. These unique lenders, once referred to as “hard money” lenders, lend their own money from their own accounts and hold or “portfolio” the loans until maturity. They are cash rich and do not need to sell or borrow against their loans to stay in business. Private lenders are not deterred by the problems in the secondary mortgage backed bond market.

Private money will cost borrowers more than institutional financing, but lending standards are much more flexible and usually not credit driven. (more…)

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In a typical private money lending transaction, you the real estate investor (borrower) will borrow from a private individual (private lender) and the transaction is documented by a Promissory Note and Mortgage.

Additionally, you will need to name your private lender on your property insurance. We also recommend you included a disclosure statement.

Promissory Note

One of the most important documents you will ever sign with a private lender is the actual Promissory Note that creates the loan obligation. (more…)

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In today’s uncertain economic climate, financing a real estate venture through a private lender is considered a viable alternative to seeking a conventional mortgage through a commercial institution. With commercial lending institutions folding under the pressure of the Wall Street crunch, private lending is becoming the preferred alternative to financing real estate.

Obtaining financing from a private lender is beneficial to real estate investors who seek immediate financing to close a deal. This helps to avoid hassles that occur with financial documentation that is routinely required by conventional mortgage lenders. Private lending enables real estate investors to potentially close a deal much faster without having to endure the red tape of a conventional mortgage lender.

A real estate mortgage through a private lender is a very secure way to borrow due to the fact that this type of loan represents a significant percentage of the appraised property value with a lower loan-to-value ratio than a conventional mortgage lender. Additionally, the private lender is able to make a quick decision that would otherwise take longer with a conventional institution, where it must be approved by a group of loan decision makers. (more…)

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One of the most important documents you will ever sign with a private lender is the actual Note that creates the loan obligation. In a typical private lender transaction, you, the real estate investor (borrower), borrow money from a private individual (private lender) and that transaction is documented by a Note and Mortgage.

The Note lays out the terms and conditions under which the private lender is willing to lend you money and under which you are willing to borrow money. The Mortgage is the security document for the borrower’s performance under the Note and usually is secured by a piece of real estate you own or are about to purchase. (more…)

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How Do You Market To Private Money Lenders? As I’ve said before, every business on the planet is in the business of MARKETING.

Yes, that includes you.

First and foremost you are a marketer… second you are an investor. You must know how to get leads in order to even have a chance to put your investment knowledge into action.

So, to get private money lenders for your real estate investing business you must find the people who have money. (more…)

photo credit: TheTruthAbout…

Although conventional lending institutions have long been considered the popular choice for obtaining a property mortgage, the increasingly fast paced environment has prompted real estate investors to turn to private mortgage lenders to fund their real estate ventures. This is due in part to the snags and red tape in the convention mortgage lending process and the increased competition in the global real estate marketplace.

Connecting with private mortgage lender can sometimes be tricky due to private lenders being integrated with conventional lending institutions when it comes to the advertising industry. On flip side of the coin, some private lenders are also conservative about advertising due to probable issues with the SEC on the state and federal levels (more…)