Bringing Private Money To Closing

When you go to war, you must come prepared

When you go to war, you must come prepared. You must bring with you your best weapon. The same principle is followed in real estate investing. And for investors who purchase properties, they often use private money. This form of financing is simply fantastic, especially for those who buy houses that will be used in rehab projects. With this form of funding, you are sure to seal the deal with no worries whatsoever.

Also known as hard money, this funding is widely used in the field of rehabbing houses. In this business, the investor buys a cheap property and then makes the necessary repairs on it to increase its value. He will then sell the house at a much higher price, bringing home a huge pay check after the project. In this business though, investors experience stiff competition for ugly and cheap houses. These dilapidated properties usually go to investors who have ready financing something that is rather difficult if not impossible to achieve with traditional lenders like banks.

The case is different when it comes to private money. This is provided by unconventional lenders with just a few days after the completion of your application. They are speedy in processing because they cater to fewer loan applicants, most of whom are real estate investors. Because the process is shorter, you can secure hard money loans and beat your competitors for the deal. Owners usually sell their house to those who can close fast, not to those who can close high.

Apart from getting to the table first and making your competitors eat dust, bringing this financing to closing will allow you to rehab houses without spending your personal money. Traditional lenders provide loans that are able to cover the existing price of the property. But remember, when rehabbing houses, the investor usually purchases a house in dilapidated condition. That means you need money to purchase the house and money to make repairs on it. While traditional lenders are willing to help you buy the house, they wont support you in repairing it.

Again, private money is a different case. Hard money lenders usually base the amount they will loan you on the after repair value of the property, not on its value in a dilapidated condition. Therefore, you will get a larger amount thats usually enough to cover purchase and repair. When you have financing this strong on the table, you are sure to have the upper hand. It is your best weapon when closing a real estate deal.

Need more information on this form of financing? Go to RehabHardMoney.com right now.

by: William Carter

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