Private Real Estate Loans

Always Ask The Owner to Finance The Sale First

Private real estate loans, are made by private hard money mortgage lenders to flippers and borrowers with credit issues.

Home owners that seller finance are considered private lenders because they are loaning you their equity.

What borrowers need to know about private real estate loans is: What the rates are and loan terms.

Do the terms fit your investing or flipping plans and are the loan costs competitive? Keep this thought in mind Seller Financing has no loan fees.

A good way to finance real estate purchases is with private hard money loans. For the most part private lenders are real estate investors with money to invest and they understand the mortgage loan business. They would rather make loan fees that flip real estate because it is a lot less messy.

I know some farmer that have tons of money and like earning 15% interest so they started making Hard Money Loans. using their own capital to fund the loans.

The private investor uses hard money lenders to analyze the loans and the real estate that secures the loan. This way they can stay out of the deal. Good trick if you have $1,000,000 in cash sitting in the bank.

Private Real Estate Loans earn between 12% and 21% for the investor plus loan fees. The lenders do all the work and take their cut off the top.

The net yield is good and the private investor has access to the lenders real estate and lending knowledge as part of the transaction.

Savvy real estate flippers can make a lot of money if they can arrange loans to buy Bargain Real Estate before someone else buys it. Most people flipping houses need more cash than they have on hand, because of the high cost of rehabbing the property. Buying the property at a good price is really where the money is made.

If Credit is a problem check out Poor Credit Loans. Then get your credit fixed because it will save you tons of money.

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The cost of renovating a house generally is much more than most people think. Especially if the house was built before 1987. Homes before that had Asbestos and Lead Paint. This is expensive because you must have a certified worker do the clean-up.

If you are forced to clean-up a house with asbestos or lead paint plan to Pay Big Money, because you must hire someone that has a license to do the work.

If you are new at flipping houses get to know some private real estate loan brokers. It is best to start looking for the money before you go shopping for property because good buys usually must close fast.

Most people want to own their own home. The problem for most first time home buyers is if they are lucky they can come up with just enough money for a down payment.

So most first time home buyers buy real estate that has been refurbished and is ready to move into.

Investor Buyers should make sure they have the funds to close escrow, renovation, and loan costs prior to looking for fixer real estate to buy.

1. Cash is king when you have it. If you have it, be prepared to prove it. Most sellers will ask for proof of funds before they will take your offer.

2. The next best thing to having cash is knowing how to structure Owner Financing. When you can talk the owner into financing the sale of her property you have just hit the jackpot.

3. When you use your own personal funds your money will be tied up until the property is sold or refinanced.

4. Refinancing non-owner occupied homes is expensive. Expect to pay several thousand dollars in loan costs and fees.

5. Line of Credit and "HELOC" home equity loans are a good source, but lenders are very tight today. If you are not connected with a good bank or credit union you will probably have a hard time getting an Equity loan.

6. This leaves Hard Money and private real estate loans as your main source of funds to buy or rehab the property.

Remember this. If the Price is Right you can afford to pay for the loan no matter what the costs.

Always Use Some Good Business Judgment When Borrowing Money.

If you are flipping homes have a connection for private real estate loans even if you don't need one, because the day will come when hard money will make your deal work.

PRIVATE REAL ESTATE LOANS: Some times avoiding legal issues cannot be done, so if you ever find yourself with legal troubles and want to work on it yourself, this information may be what you have been looking for. Jurisdictionary Watch the FREE Instructional Videos. Left Side Half Way Down...

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