Dissecting Private Money

One of the most important tasks of a real estate investor is to build bridges to other people

. Believe it or not, befriending other people, even your fellow investors, can be a big help to your career and to your business. It allows you to find and sell properties quickly. In addition, it enables you to find funding for your investments, especially if you dont have enough cash in your pockets.

If you want to become a successful investor, some of the people that you should build bridges to are lenders of private money. As we all know, one of the basic requirements of investing in real estate is having access to a considerable amount of quick cash and private money lenders are known for providing quick financing.

Unlike traditional lenders such as banks, credit unions, and mortgage companies, private money lenders are more amicable and easier to deal with. They are more accessible and most of them wont ask questions about your credit rating. So even if you have a poor credit score, you can still borrow funds from these financiers.

The reason why lenders of private money are unfazed by a borrowers poor credit rating is that they dont care about the latters credit record as private money lending is primarily a type of asset-based financing. A private lender usually verifies the eligibility of a loan application by assessing the after repair value, or ARV, of a property for which the loan is being made. If he feels that the borrower can make big profits from the collateralized property, then he is likely to approve the loan application.

An advantage of borrowing private money instead of traditional banks loans is that a real estate investor doesnt have to deal with a processing team or panel when filing a loan application. In addition, he doesnt have to submit reams of paperwork and other credentials. What he needs to do, however, is to find good deals to convince the private money lender that financing the project will also bring the latter great profits.

To find private money lenders, you should ask around to determine who might be willing to provide funding for you investment projects. You can also ask referrals from accountants since most of them do paperwork for those who have access to a huge amount of ready money.

Meanwhile, if you want to learn how you can take advantage of private money when investing in real estate, visit www.REIWired.com, your prime source of quality real estate education on the Internet.

by: Daniel Mc Grey

POST COMMENT

Investing In Real Estate After The Recession Quench Your Thirst For Knowledge With Reiwired Real Estate Investing: Age Is Not A Factor Who Are Hard Money Lenders? Rehab-real-estate: Making Your Rehab Project A Success Advantages Of Apartments And Condominiums Rehab-real-estate: The Secrets To Finding Motivated Sellers Know If Your Agent Is Telling The Truth Or Not Philadelphia Commercial Real Estate News Advantages Of Condominiums In The Philippines Branching Out Into Affiliate Products: Marketing To Buyers Can The Investor Make Good Returns From Property In India Now? Red Ledges Success In Current Economy By Red Ledges On October 12, 2009