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First – Determine how much money you need to acquire a certain property and be sure to include the purchase price, closing cost and complete renovation costs. If you do not know the renovation cost be sure to make your best estimate so you do not leave these out.

Second – Start to market for private lenders. Make a point to tell everyone you know and meet “that you investing in discounted real estate investments and are looking for investors.” Show your potential private lenders how to start investing passively in investment real estate. You can also use other marketing strategies such as sending out post cards to wealthy people or putting up flyers in 55+ communities.

Third – You will need to create a presentation kit to educate your potential private lenders to the power and security of investing in discounted real estate. Essentially, position them as “the Bank.” (more…)

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When considering financing through a private mortgage lender, you must first locate a private lender with an interest in your particular real estate venture. Private lenders are ordinary people who are willing and financially able to fund your real estate venture by means of their own assets. You can locate private lenders through networking with others in the business, asking for referrals, or making a public presentation to a group of potential private money lenders.

Assuming you have located the private mortgage lender, you will need to set up a meeting to negotiate the terms of the private mortgage loan. Keep in mind that the private lender you choose can secure funds for you through a commercial institution or through personal assets such as bonds, stocks, or cash. You will want to negotiate terms that will present a win-win situation for both you and the lender. (more…)

photo credit: Mikey G Ottawa

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. The Promissory 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 Promissory Note is where you want to control the private lending process in your favor and give you the borrower the control and flexible you may need in the future. If the Promissory Note does not have the right clauses contained within it, you are potentially giving away tremendous control to your private lender and tying your hands in the future. (more…)

photo credit: David Boyle

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…)