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What are hard money lenders?

Private investors whom lend their money out high rates that local banks won’t do.

Hard money loans are easier to get and funded very fast at lighting speed. It is referred to especially with real estate investors as asset based lending. The collateral on the loan becomes the real estate. They are far from conventional loans, since the underwriting guidelines that private money go by are far different from your local banks.

For those seeking emergency funding sources, or that have situations that are time sensitive and need to close quickly in days not weeks for their money, hard money is a solution period! Credit scores or bad credit is not a factor for most cases, although there are hard money lenders that do look at a borrowers credit history and are credit driven but for the most part they are not credit based lenders.

Based upon their own lending criteria, HMLs lend money on a short-term basis 6 months to 1 year to borrowers who use it for a variety of profitable purposes. These may include the following real estate loan types: bridge, refinance, development, acquisition, rehab, etc. Since Hard Money is more expensive than traditional sources (14%+ interest rate and 2-10 points+ in origination fees), borrowers usually have a financial gain from using hard money, so the high interest or points usually is offset by the financial gain.The loan cost is not an issue when they may make $150k and pay $30,000 to use their money, would you use it if you could make $150k and pay $30k to use it…

What Type Of Terms Can You Get With Hard Money Loans

These types of loans will vary from private lender to lender. Upfront application fee, due diligence fee and commitment fee may be charged and vary from lender to lender again. Generally they will fund a loan for 50% LTV on raw land and up to 50-70% LTV on the finished product, at an interest rate of 14%+ (depending what area of the country you are in at times ) and for a period of six months to three years. They will also charge between 2-10 points as an origination fee, to be paid out of proceeds. Can be interest only or amortized.

Some lenders will fund interest, origination fees, rehab money, etc.; others will not. Ultimately, when selecting a HML, borrowers will need to understand how these options fit best into their plans.

What Makes Private Money A Great Financing Source And Option?

Your local banks, credit unions fill a definite need for low cost money. Borrowers would love to use them for all of their needs and real estate deals. However, there is a market out there that traditional lenders cannot loan money on. That is where private money comes in and why they exist. They fulfill a need that local banks cannot fill due to government regulations, stricter underwriting guidelines, lower risk profiles, longer funding timeline, etc.

Top 10 Reasons To Consider When Deciding About Hard Money Loans

1. SUPER FAST SPEED

Can close in 5 – 14 days after they get all necessary documentation, banks can take up to 45-60 days.

2. DOCUMENTATION REQUIREMENTS ARE EXTREMELY LOW

Require documentation but not nearly as much as traditional lenders, fund based on the value of the property only and not the borrower credit standing.

3. BAD CREDIT NOT AN ISSUE

Bankruptcy, foreclosure and a FICO scores under 490-600 are no problem. Traditional lenders almost always require a great credit history.

4. VERY FLEXIBILE

Flexibility with loan structuring..awesome! Terms, interest reserve, draw schedules, cash out, financing carry, etc

5. GAP/BRIDGE FINANCING

HMLs are usually very experienced real estate lenders who understand that projects do not always follow the given plan. If a gap in funding exists and the loan and supporting documentation make sense, HMLs will typically fund. Whereas, IL’s guidelines are typically not flexible and they turn down gap loan requests if borrowers get off schedule.

6. FOREIGN NATIONALS LOANS NO PROBLEM

Foreign nationals can get a loan with a hard money lender but will be difficult to get a loan with a traditional lender who have problems lending to nonus citizens.

7. WILL LEND ON HIGHER RISKY DEALS

Churches, non-profit are not a problem with hard money lenders, but are with traditional lenders who are concerned if they have to foreclose on a church loan, and the bad publicity they will receive.

8. PERSONAL GUARANTEES NOT REQUIRED

Loans based on the value of the property so personal guarantees are not necessary. Local banks always require personal guarantees.

9. FLEXIBLE LOAN TO VALUES (LTV)

They are more flexible then traditonal lenders being that they will decide what Loan-to-Values (LTVs) they will accept based on their affinity for the project, cross collateralization, possible equity participation, etc. Traditional lenders will turn down loans asap if ltv’s are to high high.

10. SUBORDINATE LIENS

Hard money lenders will lend on a 1st, 2nd, 3rd or lower position, as long as, the value of the property is there. Local banks may do a 2nd, and hardly ever a 3rd. Typically, Traditional lenders always want to be in 1st position.

What Should You Expect With A Hard Money Loan

If you have a fantastic deal with a super LTV and can’t go to a local bank because of bad credit, or need for funding in two weeks or faster. Now that you know and are informed about what is hard money and and value of concept of it you can send the loan to a private lender. You will pay more money for the loan bottom line then your local banker, but will be easier and quicker to close your deal.

Each deal is on case by case basis, unique; terms vary and each structure of a deal can be different. Lender criteria adjust based on the specifics of each deal, so borrowers will need to be flexible.

Here some things to keep in mind when applying for a hard money loan:

* Title insurance is a must
* All delinquent taxes, judgments, etc. and other liens on the property will typically be taken out of the proceeds unless specifically excluded.
* Insurance, typically, will add the lender as co-insured
* Fund control is always set up on construction, development and any loans which have budgets * Borrower will pay all closing costs, fees, etc. out of proceeds
* Many lenders require the property be put into a single asset LLC, which the loan is made to
* Borrower should be prepared to assign rents
* Interest, in most cases, at least partly will be reserved or prepaid
* Some HMLs require an upfront application fee, due diligence fee and commitment fee. Make sure you understand these fees and how they will be used and if they are refundable
* Almost all lenders require borrowers to have money in the deal. Additional collateral may be required by cross collateralize other properties to keep the LTV acceptable.

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Financial Loan Consultant… Hard Money – Hard To Place Loans Specialist

Do hard money commercial and residential loans nationwide, do alternative business financing for any type of business on a national level as well!

Specialize with restaurant owners whom are opening a restaurant and cannot get a loan because they are just opening up, my product was created to help you if you are opening a restaurant, and could get funded 48hrs after opening your restaurant.

Call now 24hrs voice mail at 718-512-8587

Visit hard money business loans section at Restaurant Funding

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A private mortgage lender is essential to the success of your real estate venture and your business relationship with the lender during the life of the real estate loan. For many real estate investors, working with the right lender means the difference between a sweet deal and a deal gone bad.

Many real estate investors opt to work with private mortgage lenders to escape the bureaucracy involved with the conventional lending process. The global real estate market is competitive and often the speed of the transaction is crucial to the success and outcome of a real estate deal.

Loan-to-Value: Private mortgage lenders are concerned with loan-to-value (LTV) ratios which is the calculated percentage of the requested mortgage to the total appraised value of the property. When working with a private mortgage lender, you will want to learn what their criteria are for lending when it comes to the loan-to-value ratio. This will vary according to the type of property you are seeking to finance.

For instance, a private mortgage lender will typically lend a lower percentage on raw land and a higher percentage on a multiple unit property that produces cash flow. If the property and the borrower meet the criteria of the private lender, they will be more likely to lend the maximum percentage. If the deal is considered less than ideal, the percentage of the loan will be significantly lower.

Private Lender Property Interest: It is important to find out the property interests of the private mortgage lender with regard to the type of property they would most likely be willing to fund. Typically, the private lender would be interested in a property that is easy to sell if the borrower lands in default. This would most likely be a property that produces cash flow as opposed to a non-income producing property such as raw land.

Property Income Potential: Another consideration of private mortgage lenders is how much emphasis they place on the income potential of the property being considered for financing. Some private lenders insist on a property that provides sound collateral because this adds a great deal of security to the loan. In other instances, private mortgage lenders will also consider cash flow from other existing properties as a substitute.

Exit Strategy: The repayment strategy of the borrower is of utmost importance to most private mortgage lenders. Private lenders will evaluate whether or not the plans for repayment by the borrower are feasible or questionable. For example, if the borrower plans to satisfy the debt by obtaining another mortgage, the private lender will need to consider the credit history of the borrower.

Decision Making Process: You can expect the private mortgage lender to use a similar decision making process to a conventional lending institution when considering you as a borrower and the property you are financing. The nice part is the private lender may fund a venture that the conventional lending institution would refuse and will provide creative methods when it comes to repayment terms.

I invite you to learn more about Private Money Lending and get my new FREE 20-page ebook titled “Discover the Secrets of How to Fund Your Real Estate Deals with Private Lenders!” by clicking here http://realestatewealthtoday.com/FREE-eBook.html

Mike Lautensack is a full-time real estate entrepreneur in Philadelphia, PA and creator of the Private Lending Presentation Kit. This powerful done-for-you kit is loaded with tools and techniques to attract and develop a consistent stream of private investors into your real estate business. To learn more about this kit and receive your FREE Real Estate Wealth Newsletter go to Private Lending Presentation Kit

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When considering a home purchase you will want to excercise many options other than the traditional lending facilities and these have been known for the highest interest rates. If the traditional mortgage lenders are not able to meet your financial needs, you may consider turning to hard money lenders. By going through hard money lenders, you can close a faster loan and get access to your cash sooner. If you are starting a business, buying a business or you want to upgrade your current business, getting a hard money loan might be perfect for your situation.

Many companies offer hard money loans, and if they can’t finance you, you should have no problems finding hard money lenders that will back you and your business. You can finance equipment, commercial real estate, small business loans, construction loans, and more with a hard money loan.

Equity based hard money loans can be funded in as little as two weeks when you apply with hard money lenders. Private lenders can use your commercial property as collateral for these quick and easy loans. Most loans have up to a 75% loan-to-value ratio, and have a super fast turnaround time for funding.

From 1 million to 300 million, you are sure to find the right loan you need. Hard Money Lenders and Mortgages

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.Say you have a subject to. How can you give a first mortgage to a private lender if you are going to be making the mortgage payments?

First things first! That is kind of a trick question because you can borrow both first and seconds from private lenders. Did you know this?

Now private lenders come in handy when you’re borrowing a second behind the subject-to loan. In fact, it will always be a second if it’s behind a subject-to loan, and that is commonly used when you are borrowing small amounts of money to either bring payments current (or pay the seller some cash to get out – or both – or doing some repairs, etc.).

It will always be second and it will always be behind the first. So, you will find those loans easy to get because they are small amounts. You may also realize you can get a lot of investors that don’t have the larger amounts that it takes to make the first mortgage.

As long as you keep your loan to value ratio down below about 70% or so on that second you shouldn’t have any trouble at all getting those seconds.

So how can you give a lender a first mortgage?

Well the only way you can give a lender a first mortgage is pay off all the underlying debts on the property with that private loan, which means it is going to be a larger loan than any small second. The order of which a mortgage is, whether it’s first or second, is only when it is recorded.

So, in essence, you have to get enough from the private lender and give him the first mortgage.

And that frankly is foolish to do on most subject-to deals with low interest loans on them.

You never borrow high interest money to go pay off low interest money!

When it comes to real estate investing, I highly recommend information from Ron LeGrand. For valuable information regarding investing in homes visit RonLeGrand.com. You can also find useful investor resources in the free newsletter at MillionaireMakerNewsletter.com

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Many of us have heard about private money, hard money, and other types of non-traditional funding sources for real estate transactions. It sounds good but you may not be fully aware of all of the benefits that private lending offers to you and your business. With that in mind, I would like to outline the top ten benefits of using private money in your own real estate investment pursuits.

Benefit #1: You are in control!!

The first benefit of private money that I’ll mention is probably the one that is the most important. Private lending gives you far more control over the buying process than afforded by either traditional lenders or even hard money lenders. How often do you get to negotiate things like interest rate with a traditional lender? These rates are generally predetermined and are dictated by your financial strength and/or credit score. Furthermore, the terms of repayment for traditional or hard money loans are rarely negotiable. They know they’re in the driver’s seat (because they’re the ones lending the money and they have clients willing to accept their terms if you choose not to) and pass along that knowledge to you via terms that they dictate. With private lenders, you negotiate the terms of the loan. Granted, the private lender has a say in it but you are in a stronger negotiating position because you are offering an opportunity they might not be able to find elsewhere.

Benefit #2: There is no limit to how much private money you can use on one project.

One of the greatest frustrations in traditional or hard money lending is that of the Loan to Value (LTV). With great credit and a solid income/asset portfolio, you may be able to borrow 100% of the purchase price for a piece of real estate. But what if you have less than perfect credit, limited or “hard to document” income, or desire to purchase land or a commercial property? In these cases, lenders want to see 10, 20, or even as much as 30% down to loan you the balance. This limits your ability to grow your business, even if you’ve found a tremendous bargain that is a sure winner.

Private money does not present the same rigid obstacles. Once again, remember you have the flexibility to negotiate the terms with your lender(s). This means you may borrow enough to fund the entire purchase price of the property if so desired. A private lender will likely want to see how good the investment is first before they will loan this high of a percentage. That is natural and you should be selecting quality investments for your private lenders in the first place. That being said, how cool is it that you can fund 100% of your projects, including repair costs, just by establishing the right relationships with your private lenders?

Benefit #3: Private money is less expensive to borrow.

While interest rates with private lenders may be comparable or slightly higher than with traditional lenders, the absence of third party involvement can dramatically reduce or even eliminate the closing costs and other fees that are normally associated with traditional loans. Furthermore, most private money loans have fixed interest rates and/or are based upon simple interest amortization so you don’t have to worry about floating adjustable interest rates or interest heavy payments in the early stages of a loan. It is also worthwhile to point out that many private lenders will willingly accept either a portion of the profit from the sale of a property or a fixed rate of return upon the sale, effectively eliminating any out of pocket costs during the loan. How many traditional lenders that you are aware of would defer interest payments until you sold a property for a profit?

Benefit #4: Private money is faster than going through banks.

One of the common complaints about traditional lending is that the process proceeds at the lender’s pace. This can mean as much as 30-60 days to close a loan, even if you are in compliance with all the lender’s requests. This amount of time may not seem like a lot but it may mean the difference between securing the deal of the year and not doing so, just by not being able to close quickly enough. In these cases, both you and the seller want to move quickly but traditional lenders will still operate at their own pace, regardless of the urgency at hand. Private lenders can often lend immediately because they have direct access to their own lending capital and thus dictate both when it is used and for what purpose. Once you have established a relationship with a private lender or lenders, you can act on these great bargains and know for sure how quickly you can close, without having to wait on the bank. Remember that a great real estate bargain will look as attractive to a private lender as it does to you so they have incentive to make things happen quickly to cash in on those opportunities you present to them.

Benefit #5: Having a source of cash allows greater flexibility for buying properties at a discount.

You’ve all heard the phrase “Cash is king.” Real estate is a perfect example of this, with the frequency of advertising that offers cash for houses, quick closings, etc. True, cash is a powerful leveraging tool with a seller, particularly one who is highly motivated and needs to sell very quickly. By definition, a cash offer only means that there is not a financing contingency in the contract. It doesn’t mean you have to have the money available yourself. Private money is a perfect example of a readily available source of outside funds. When you have this available to you, you have the confidence and the means to offer cash for some or all of your purchases. Faster closing times and cash purchases should translate into more attractive purchase prices if the seller is properly motivated. Lower purchase prices mean better bargains so this benefit of private money is huge, given its impact on your profit margin for each transaction for which you are able to offer cash.

Benefit #6: There are no lender “seasoning” issues or restrictions on loan amounts with private money.

Many investors are not familiar with lender seasoning issues and the effects these can have on successfully closing transactions. In a nutshell, many lenders will look at a recent purchase and see a sale within a short period of time as a red flag, questioning the ability of the property to have increased in value so quickly. When you offer cash and use private money to fund the purchase, there are no appraisals required, no recent loans issued to compare to, and therefore a bargain remains just what it should be, a bargain. Another lender issue concerns the amount borrowed. Many lenders disallow loans less than a certain amount and you may not be qualified for purchases above a certain amount. Both circumstances can limit you if you are using traditional lending sources or even hard money. The use of private lending removes these issues because the lender is more interested in the rate of return and the quality of the transaction than these other issues.

Benefit #7: Using private money preserves your credit and buying power.

Many investors have solid financial strength and can purchase properties through traditional lending channels. This is true up to a point. Once you purchase a certain number of properties, it can become increasingly difficult to purchase more, even if they all have good equity and are producing monthly positive cash flow. If you plan to purchase many properties, the use of private lenders becomes all the more critical so you don’t hit a wall with your own personal buying power. Another issue to consider on this theme is the impact of multiple purchases on your own personal credit. If you are buying 20 houses per year conventionally, you will have at least 20 credit inquiries, which will reduce your FICO score, even if the impact is brief. Private money requires no credit check and thus removes the proverbial restraints on your purchasing power.

Benefit #8: Using private money makes it easier to run your investment business through your entities.

You’ve probably heard that it is better to run your real estate investments through corporations, LLCs, or other legal entities. This is highly advisable and is all well and good in theory, until traditional lenders and even hard money lenders want to see credit backing a loan. Many lenders are hesitant to issue loans to entities, even if you sign personally as a guarantor on the loan. Since many entities are too new to have a credit rating to back them, most investors must take title to a property personally if they use a traditional funding source. Private money all but eliminates this obstacle and also improves the asset protection aspect of your business. Private money backing means you can offer cash for a property and therefore take title to it any way that you wish. This allows you to keep your investments out of your personal name, which makes more sense for both asset protection and for tax purposes. Additionally, use of an entity like an LLC to purchase a property is a way to secure your private lender’s contribution to the project .

Benefit #9: Private loans require less paperwork!

While the use of private lenders may require some paperwork to make everyone feel secure about the investment opportunity you are presenting, the quantity of paperwork is far less than if you went with another funding route. Cast your mind back to the last time you closed on a traditional mortgage or even a loan through a hard money lender. How many trees were required to produce the stack of paperwork that you had to go through and sign? A small forest, perhaps? These large volumes of paperwork are a necessary evil in the lending business, designed to protect all relevant parties, disclose any number of minute points of interest, etc. etc. The point is that traditional lenders are required by law to have you jump through these hoops. Private lending is not subject to these kinds of laws and restrictions so that means less paperwork for you and your prospective lenders!

Benefit #10: Securing private money gets you in that negotiating frame of mind.

I’ve heard the phrase many times, ‘You don’t get what you deserve, you get what you negotiate.’ This is particularly true in business and especially true when working with private lenders. Negotiation is something of a lost art to many American consumers, as we are socially conditioned to not bargain for things in the same fashion as in other cultures. Think about that. My point here is not to suggest that you are a poor negotiator. Quite the contrary. Negotiation, like any other tool in running a business, is one that can be developed and improved with a little bit of effort. What I’d like to suggest is that you take the time to develop the skills that I know you already possess but maybe just don’t use as often as you could be.

Dr. Matt Fagerness left the academic world to pursue his own dreams of business ownership and doing things “his way”. Today, he is a successful real estate investor, venture capitalist, business consultant, and author who has touched the lives of new entrepreneurs who are looking to build upon their own dreams of success. Focusing on written materials and coaching services for success-driven and business-minded people, Dr. Fagerness has a no-nonsense approach to starting and building small businesses that speaks volumes to the clients with whom he has worked. Dr. Fagerness and his various professional services are accessible by visiting http://www.jakejasper.com

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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. Essentially, a hard money loan is often the best choice for oney that is needed on a short term basis.

Unlike conventional financing, a hard money loan also known as a private loan originates from a private individual or institution unlike a bank. The loans are generally short term between 6 and 12 months and have a high, interest only payment generally between 10% and 14%
Another major difference between a hard money loan and a conventional loan is that a hard money loan is not based on a person’s credit but instead on the value of the project after its completion. A good example is if John has a house that he wishes to rehab and sell for $100,000.00 a hard money lender will lend up to $65,000.00. This is what is known as Loan to Value or LTV. Most hard money lenders lend anywhere from 55% to 70% LTV depending upon what type of project the borrower has.

Now you are probably asking yourself what the catch is, how do these lenders make there money? Hard money lenders make there money 3 different ways. The first way they make there money is the closing costs. These are anywhere from 1 to 4 percentage points of the overall loan. These points are paid when the loan is completely paid off in full. The second way they make there money is the interest only monthly payments on the loan which is anywhere from 10% to 14%. The third way they make there money is if the borrower happens to default on the loan. Being as the loan is not based on the person’s credit, hard money loans are secured by the property itself. If a borrower defaults, the hard money lender now has a property or piece of land for 65% of what it is worth. However, it should be stated that this rarely occurs as most hard money lenders are not in the business of foreclosing on properties.

So should a borrower use a hard money lender? The simple answer is if a borrower has a real estate project that needs short term financing that a conventional bank will not lend on, yes.

Written by Peter Hesselman pete@houseflippingloans.com

Eclipse Mortgage

http://www.houseflippingloans.com

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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.

Fast Completion of Financing: Real estate financing via a private lender can potentially be completed within a week of the decision because the type of property being considered for financing is the primary factor in the decision instead of personal information pertaining to the borrower. When compared to a conventional mortgage lender, private lending criterion is more advantageous to the borrower because conventional mortgages require more details like the borrower’s history, debt ratio, and overall financial situation.

No Current Financial Information: In some instances, it is necessary for the real estate investor to receive a decision immediately to avoid the loss of a potentially lucrative deal in a competitive marketplace. Using a private lender circumvents the requirement for personal financial information because the lender focuses on the value of the property being used for collateral. Obtaining funding from a conventional lending institution requires the borrower’s personal information to be current. If the information is not current, the loan decision is delayed and inevitably, the borrower loses the deal.

No Credit and Debt Ratio: Conventional mortgage lenders focus on borrower credit and debt ratio as well as the type of property being financed. In this instance, the borrower may not be able to obtain credit or the type of property chosen does not represent the interests of the conventional mortgage lender. In this case, the private lender is the solution for the borrower as long as the property has a high value appraisal and produces sufficient cash flow to satisfy the loan.

Larger Loan Amount: Choosing to finance real estate through a private lender sometimes allows the borrower to receive a larger loan than one received through a conventional mortgage lender because the private lender focuses on the appraisal. The conventional mortgage lender often poses penalties if the borrower acquires property at a discount to the appraisal. This means that the borrower must invest more of his/her own capital in the venture which would otherwise not be required with a private lender.

I invite you to learn more about Private Money Lending and get my new FREE 20-page ebook titled “Discover the Secrets of How to Fund Your Real Estate Deals with Private Lenders!” by clicking here http://realestatewealthtoday.com/FREE-eBook.html

Mike Lautensack is a full-time real estate entrepreneur in Philadelphia, PA and creator of the Private Lending Presentation Kit. This powerful done-for-you kit is loaded with tools and techniques to attract and develop a consistent stream of private investors into your real estate business. To learn more about this kit and receive your FREE Real Estate Wealth Newsletter go to Private Lending Presentation Kit

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.

So, how do you cut to the chase and connect with a private mortgage lender who will finance your next real estate venture?

Locate a Private Mortgage Lender: Private mortgage lenders are potentially all around you. They reside in your community, they may live in your neighborhood, you may find them through investor associations, perhaps they advertise, or maybe some of your friends can refer you to someone they know. The bottom line is if you look around you, private lenders are virtually everywhere.

Marketing Strategy: Connecting with a private mortgage lender requires a marketing strategy on the part of the borrower. You will need a networking strategy to locate potential private lenders and then you will need a marketing plan as well as a business plan. Your audience will be private mortgage lenders that are interested in earning a high interest rate on their investment which will be secured by real property along with a loan-to-value ratio that does not exceed 75 percent.

You can choose to market your venture by inviting a group of potential private mortgage lenders to a presentation that you have prepared, that pitches the real estate venture to your potential investors or you can opt for other marketing strategies. Other strategies could include advertising high interest on investments, circulating your business card, networking with other real estate investors, mailing information, or locating prospects by word of mouth.

Use Multiple Lenders: As you make connections with private mortgage lenders, keep in mind that you may use more than one private lender to finance a single real estate venture. In some instances, one lender may be unable to fund the entire deal. In this case you can negotiate one private lender to fund the first mortgage and the other lenders may act as second mortgage holders.

I invite you to learn more about Private Money Lending and get my new FREE 20-page ebook titled “Discover the Secrets of How to Fund Your Real Estate Deals with Private Lenders!” by clicking here http://realestatewealthtoday.com/FREE-eBook.html

Mike Lautensack is a full-time real estate entrepreneur in Philadelphia, PA and creator of the Private Lending Presentation Kit. This powerful done-for-you kit is loaded with tools and techniques to attract and develop a consistent stream of private investors into your real estate business. To learn more about this kit and receive your FREE Real Estate Wealth Newsletter go to Private Lending Presentation Kit