Home » Business

How to Get All the Private Money You'll Ever Need

Jun 19, 2008
There is a lot of information and even courses, seminars and boot camps out there on private money and I'm sure it's because private money is one of the few sources where you can generate funds for your deals without having any previous credit, cash, income, job, debt ratio or anything like that. Private funds are very similar to hard money or rehab loans. The only difference is, instead of going through an institution or mortgage banker, you're actually looking for individuals with money that would like to lend it out at a decent rate of return.

There are many different ways to generate private funds and find the individuals. The first one is your local Real Estate Investors Association. Go and find out who the players are. Frequently individuals, as well as, mortgage brokers and hard money lenders, will be venders of your local REIA group. Many people suggest having seminars and luncheons to find private money. I don't agree with this, although you can do it. My question is, Are you looking for houses or are you looking for money?

The best thing about private money is you don't have to be concerned with being self employed, your debt ratio, your credit or your experience, because the investor is basically investing their money in the property itself with you standing behind the deal.

Another good thing about private money is once you have 2-3 individuals that are loaning you money and getting a good return, they tend to move in the same circles, so you're going to have other people contact you about loaning out their money at a good rate of return. That's really a neat thing, once you get to that point.

To attract private money in the beginning, you're going to need a credibility kit or some information on who you are, what you've accomplished, proof of deals completed, copies of HUD's, etc. If you haven't done that, you need to partner with somebody and get some deals under your belt, so you can build your credibility. Most private money lenders will allow you to borrow their money with interest only payments. Some will even allow you to make quarterly payments or annual payments. They're not generally going to be longer than 12 months because they want to get their money back and turn it. You want to refinance the property quickly and payoff the private so you can turn around and borrow the money again.

You can use a private lender for just a 24 hour period. You'll do this when you need to close on a property to resell to your buyer the same day. You could offer your private lender around 2% of the loan amount for the use of their funds. This is a good deal for you and your private lender. As an example, if you needed $100,000 to close on the property then you could pay the private lender $2,000 for the use of the money.

There are a lot of different places to find private money lenders. You can look for referrals from people that are in CDs, investment advisor referrals, CPA referrals, attorney referrals, friends, and neighbors, people you go to church with, anybody that may have cash or a portfolio that would like to increase their rate of return.

Once you find out who's using private money, all you have to do is search the courthouse records and find out who the lenders are on their. Just contact them and see if they'd like to become one of your private lenders. This is the best and quickest way to get private money.
About the Author
For more articles and a 10 part e-course on how to create your own Ultimate Buying and Selling Machine! plus over 50 training audios, simply go to www.LarryGoinsFreeOffer.com where you will gain instant access
Please Rate:
(Average: Not rated)
Views: 166
Print Email Report Share
Article Categories