Loans

photo credit: epicharmus

f you are a real estate investor and need funds to finance your real estate deals, or are looking for money to cash out of deals, there is really only ONE option in today’s market conditions. That option is a private lending program where you allow private individuals who have extra money to invest in your real estate investing business.

But with the current popularity of private lending, we are seeing our coaching students and subscribers making a number of mistakes and thought we would highlight the top 4 mistakes and what to do to avoid them when borrowing money from private lenders. (more…)

photo credit: joiseyshowaa

Private lending is the practice of borrowing money by a real estate investor to be used to purchase rental real estate directly from private lenders rather than a bank or other commercial lender. Private lenders tend to be ordinary people such as doctors, lawyers, accountants, business owners and possible retired people. Most private lenders are simply looking for better investment returns than they can typically get from bank CD’s, money markets or even bond investments. Over the past couple years these type investments have yielded a paltry 3% to 6% pretax rates. After taxes and inflation these investments have, in some cases, produced negative returns for their investors. This is why people are looking for better returns and private lending is the answer.

Private lenders are looking for returns in the 9% and 15% range and secured by local rental real estate. This kind of return will provide investors with positive investment return of almost 300% over CD’s and money markets. (more…)

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..One the most frequent questions I get from students or newsletter subscribers relates to how can I raise money to buy real estate investments through private lending without getting in trouble with the SEC. This is not an easy question but certainly an important issue. Before I would answer this question, I always tell people that I am not an attorney and the advice I give is from my personal experiences and education and should not be considered legal advice.

Is borrowing money for real estate investments from a private lender considered to be issuing a “Security” as defined by the federal SEC or possible your state SEC? The federal SEC defines a “security” as a financial instrument such as stocks and bonds including such things as notes or evidences of indebtedness etc…. (more…)