Beat Real Estate Investing Competition With Private Money

One thing that discourages some people from venturing to real estate investing is the tough competition

. Especially in the rehabbing houses business, the deal usually goes to those who have ready money. Because of this neophyte investors miss out on a lot of opportunities to profit. But what if you can have that stable support in terms of financing? Will you take it? Private money lenders say take it.

Private money lenders, also known as hard money lenders, are individuals who have extra money and are willing to help investors close deals. They lend this money even to those who do not have a good credit score. Of course, you have to pay them interest, just like when you borrow money from banks.

However, you have to pay higher interest rates when you borrow hard money. Lenders in this business usually fund loans that banks find too risky to finance. That is why they are more exposed to losses and defaults. The interest rate is their defense mechanism. It is their way of keeping the business alive.

You wont have to worry though as this is just a small price you have to pay for the benefits you will get using this kind of financing. Private money is what you need if you want to beat you competitors.

As purchasing properties to rehab is somewhat a race, youll get a nitro pack when you tap hard money lenders. If you access credit from banks, you will have to wait for at least 30 days. Traditional lenders like banks usually take at least a month to process loan applications. You just cannot afford to wait that long when you are racing against competitors.

The best thing about private money, however, is it allows you to close deals without you spending any personal money. That means youll be able to earn cash using other peoples money. Lets take the case of a rehabbing project. For example, you found a distressed property for sale at $50,000. With repairs worth $15,000, that propertys value can rise to $100,000. The $100,000 is called the ARV, or after repair value. Private money lenders usually release between 60% and 70% of the ARV. If the lender agreed to give you 65% of the ARV, then you will get $65,000. In this sample computation, you will be able to buy a property and rehab it using only the money from the loan.

Find hard money interesting? Go to REIwired.com today to learn more about it.

by: Daniel Mc Grey

POST COMMENT

Importance Of First Aid Courses London Find Freeware Computer Card Games And Freeware Windows Card Games To Play Jamaican Leaders Exchange Online Bonus Deuces Wild Poker - Play Free Deuces Wild Poker Play Free No Download Slots From Anywhere So Who Will Create The Next Revolution? Maplestory And Securely Buying Nexon Cards Online Wow Twink Guide - Level 19 Hunter Twink Gear (the Best Gears For Hunters) How To Earn Nx Cash For Maplestory Wow Gold Team's Big Christmas Promotion -- The Cheapest Price + Free Wow Gold Winter Art: Decorating For The Winter Season Promotional Products- A Unique Way Of Making People Aware About Your Business Safe Way To Online Shopping