Frustrated Because You Can’t Finance Your Real Estate Deals?
Answer these questions for me …
>> Are you frustrated because you can’t get the cash you need for your real estate deals?
>> Have you ever lost a great deal because you didn’t have funds to close it?
>> Is a lack of financing killing your real estate investing dreams?
If you answered “yes,” to any of the questions above, then private money may be THE solution for you.
What is private money?
Private money is cash from an individual that is lent to you, the real estate investor, rather than being invested traditionally through stocks, bonds, mutual funds. When you think about private money, think investment funds from an individual … any individual.
Is private money the same as hard money?
Far from it!
Hard money lenders finance deals for real estate investors as a business. They lend to investors based on the property, not necessarily based on the person. The hard money lender dictates the terms of the deal to you, the investor.
A typical hard money loan has high interest, points, and is short term. For instance, I purchased my second deal with a hard money loan. I was charged 15% interest, five points (or 5% of the loan balance), and had a term of six months to repay the loan in full.
Do you see why they call it “hard” money?
On the other hand, with private money, you dictate the terms of the loan to your private money lender. Based on the deal and your business model, you offer terms that suit your needs and provide a good return for your private lender. A typical private money loan could have 6% to 10% interest, no points, and a term that suits your exit strategy.
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Patrick Riddle: